Montenegro’s Agency for the Protection of Competition has launched an investigation into whether state aid granted to flag carrier Air Montenegro is in line with European Union state aid rules. The watchdog said, "The agency, in its endeavour to accurately and comprehensively ascertain all the facts, is initially investigating whether the payments made by the Ministry of Maritime Affairs and the Ministry of Finance towards the founding capital for the establishment of ToMontenegro [Air Montenegro’s registered name] conform to the stipulations of Article 107(1) of the Treaty on the Functioning of the EU, as well as whether there is economic continuity between Montenegro Airlines and ToMontenegro. The Ministry of Finance has already provided the necessary data and following the submission of the required information by the Ministry of Maritime Affairs, the Agency will undertake a thorough analysis and subsequently convene an hearing".
The watchdog anticipates concluding the investigation by the end of the second quarter of this year. Based on publicly available information, the Montenegrin government initially invested thirty million euros into Air Montenegro, 22 million of which were used for the acquisition of two Embraer E195 aircraft previously operated by Montenegro Airlines. In late 2022, Air Montenegro formally requested a financial injection by the state, to cover losses generated by the winter season, as well as to expand its fleet. At the time it warned it would face liquidity issues if it were not granted the undisclosed funds. The Montenegrin government shut down the country’s former national airline, Montenegro Airlines, after the Agency for the Protection of Competition found that aid granted to the carrier was illegal.
The European Commission’s annual progress reports for states aspiring to join the European Union, published in November last year, noted, “Montenegro achieved a good level of alignment with the EU acquis. Before transition to the second phase of the European Common Aviation Area Agreement (ECAA) is possible, competition and state aid requirements need to be fulfilled”. It had also previously stated, “In December 2020, Montenegro Airlines permanently stopped its operations following the decision of the state aid authority that declared the state aid to the airline illegal. In January 2021, the government established a new national airline branded “Air Montenegro”, which started operations in June 2021. Any economic continuation should be eliminated between these two companies in line with competition and state aid rules”.
Stuff the E.U, it's none of their business what a sovereign country does to their flag carrier.
ReplyDeleteMontenegro wants to join the EU and is doing a lot to do so. So it is their business
DeleteEvery country has the right to support its strategic sectors. Air Montenegro is essential for our national interests, especially in maintaining direct international flights.
DeleteThe EU’s one size fits-all approach to competition and state aid doesn't fit the realities of all countries. Montenegro should prioritize its national interests.
DeleteNot entirely true. What prevents then a large carrier to enter the market, suffocate the local carrier and then monopolize air travel?
DeleteIf Montenegro wants to be a member of the EU, then it's entirely their business whether they respect European anti-trust laws
DeleteIf they want access to EU market, they need to follow the rules. No one is pushing them to access EU market. They can decide not to do that. Then they are free to do whatever they want.
DeleteThe EU's oversight is important, but it should not come at the expense of a nation's ability to sustain its own essential services and industries.
DeleteNo one is forcing countries to join the EU, but if you decide to, there is no cherry picking here, like we are used to in the Balkans.
DeleteLike I said the other day - least transperant airline in ex-Yu. No financial reports, no info on profitability etc
ReplyDelete+1
DeleteThey rarely report their passenger numbers too.
DeleteCan I ask why is it important that discontinuity is made between old and new airline? What difference does it make?
ReplyDeleteTo write off debts
DeleteCan't they just write off debt from the previous airline?
DeleteThis agency closed one airline already. Let's see.
ReplyDeleteThis time they will conclude that everything was in line with the law and there is discontinuity between them and Air Montenegro.
DeleteI hope so. I really to think Montenegro needs a national airline.
DeleteThey got a lot of money consideribg their size
ReplyDeleteWe need to give Air Montenegro a chance to succeed. Establishing a new airline is not easy and requires support, especially in its initial stages to ensure stability and growth.
DeleteFlag carrier is essential for Montenegro
ReplyDeleteYeah but is it really? Malta doesn’t really have one and it’s doing fine. Cyprus too.
DeleteMalta has a flag carrier. They did the same as in Montenegro. Shut down the debt burdened Air Malta and established KM Air Malta which just took over.
DeleteCyprus has one too. Good one @11:59
DeleteI also think a national airline is essential for Montenegro in particularly. It is far away from the rest of Europe without good road connections. We have seen how an airline like Ryanair can completely pull out like we saw this winter. Air Montenegro is needed for tourism.
DeleteReally interested to see the total sum they got
ReplyDeleteLots
DeleteWe will find out when the agency finishes its audit.
DeleteThis situation seems like a déjà vu with Montenegro Airlines.
ReplyDeleteIt won't be the same outcome.
DeletePrivatize
ReplyDeleteWho would want it?
DeleteI agree, what would another airline get by buying them. Montenegrin market isn't big for someone to need access to it buy buying Air Montenegro.
DeleteI'm really dumbfounded by the this article. It has been 4 years they still have no codeshare agreements, no commercial agreements with any other airline, you are unable to buy connecting flights...
ReplyDeleteAnother case of mismanaged state funds.
DeleteOriginal poster here, meant to write &*airline not article.
DeleteReliance on state aid is not a long-term solution.
ReplyDeleteYet if you are Alitalia/ITA Airways you can pump in millions and millions of state money without any concern.
ReplyDeleteAlitalia was facing antimonopoly lawsuits every few years, what're you on about lol
DeleteItalian government has pumped millions into ITA, most recently just a few months ago. And no one seems to care.
DeleteSame like the EU doesn't care by the amount of airlines Lufthansa has taken over and has no issue with competition concerns about it.
DeleteVery easy: ITA was going to be acquired by LH so as soon that it was agreed EU stopped caring about state aid. LH acquired like 5 national carriers, but the money that a government of a country that is not even in the EU is a bigger problem…I really cannot understand whoever is not in the EU, why would you join this mass of incompetent corrupted clowns? If there is going to be corruption anyways, I would take my domestic one rather than importing from some other shady entities (eu cough commission cough)
DeleteAir Montenegro is crucial for our connectivity and tourism. It's important to have a national carrier that can help promote travel to and from Montenegro.
ReplyDeleteAir Montebegro is crucial for nothing; it only really connects you with Belgrade, where you're already covered more then well. This airline is a joke.
DeleteThe EU demands a lot from aspiring members but offers little understanding of their specific needs. Montenegro should have the right to support its national carrier.
ReplyDeleteLooks like Montenegro is going to enjoy all the freedom and benefits that Brussels can't wait to provide.
ReplyDelete+1000
DeleteAir Montenegro needs time to establish itself. Immediate profitability is rare in aviation and strategic patience and support are vital.
ReplyDelete+1
DeleteAnyone know what their financial result was like last year?
ReplyDeleteNo. They hide it every year.
DeleteIf they wanted to show discontinuation between the two airlines, they probably shouldn't be using the same logo :D
ReplyDeleteI think Montenegro Airlines in liquidation sued them over the logo.
Delete