Montenegro Airlines plans for 2019 after record year
Montenegro Airlines is preparing for another busy year following a record 2018. The carrier handled almost 644.000 passengers since January on 7.536 flights operated by six aircraft. The airline added some 76.000 travellers on last year, or an increase of 13.3%. The average cabin load factor stood at a record 70%, up two points on 2017. The company's passenger share at Montenegro's two international airports - Podgorica and Tivat - stood at 27%, which is up 28% on last year. The airline registered revenue of some seventy million euros. "The financial result represents an improvement of two million euros on 2017, despite the rising price of fuel. The financial results are also some two and a half times better than last year", Montenegro Airlines' CEO, Živko Banjević, said.
The Montenegrin carrier has made some tentative changes to its 2019 summer season network. The airline will introduce new seasonal flights between Tivat and Hannover from May 2. The service will run twice per week with the 102-seat Fokker 100 aircraft. During the summer of 2018, Montenegro Airlines launched seasonal operations from Tivat to Munich, Leipzig and Copenhagen. However, services to the Danish capital are not scheduled to resume next year, while flights to both Munich and Leipzig will increase from two to three per week. On the other hand, the airline will boost operations from Podgorica to Copenhagen with an additional weekly service, for a total of three per week. Furthermore, the airline will shift airports in Moscow from Domodedovo to Sheremetyevo starting March 31. The carrier will maintain up to eighteen weekly flights between Tivat and the Russian capital next summer season.
Commenting on the carrier's potential privatisation, Mr Banjević told the "Cord" Magazine recently, "Our company is focused on the implementation of a phased optimisation of its operations, which is flexible, and does not exclude the possibility of finding a strategic partner and being privatised. Difficulties within the aviation sector have already begun and will continue throughout 2019 and beyond. The growth in demand for air travel, coupled with a lack of funds, a professional and licensed workforce, the need to develop and modernise ancillary infrastructure and the enormous increase in fuel prices will undoubtedly shake-up the airline industry. This will primarily have an impact on smaller airlines such as ours, so one of the options is to seek out a stable and reliable partner, which would become part of our ownership structure". So far, the owner of Adria Airways, 4K Invest, has been widely tipped as a potential investor. "The interest alone shows us that potential investors recognise the significant results the airline has achieved on its path to recovery and that the process is being carried out in the right way. Potential investors also recognise the airline's importance and the market's potential", Mr Benjević added.
On Friday, members of parliament proposed for the state to allocate 5.5 million euros for Montenegro Airlines in 2019 "if legal requirments are met". "The company's operations are charechterised by high seasonality. During the peak season, some 45 commercial, charter and low cost airlines fly to Montenegro, all of which are larger then us both financilly and operationally. The number is significantly lower during the winter, and those that do fly to Montenegro during this period do so mostly to feed their own global networks. This shows that winter operations are unprofitable. Montenegro Airlines' financial results during the summer are insufficient to cover losses incurred during the winter months", Mr Banjević explained. He added, "Revenue generated by charter traffic, codeshares and scheduled flights are capable of covering costs and producing additional earnings. However, this revenue cannot fully cover fixed and additional costs for every destination. One of the management's key challenges is to fully implement the business plan, increase revenue and optimise costs in order to minimise losses and reduce the negative impact of winter operations on an annual level".
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