Montenegro Airlines to restructure
The Montenegrin government has adopted a new strategy for the development of transport in the country between 2019 and 2036, which outlines the planned restructuring of the national carrier and its potential privatisation. The strategy, which was adopted by the cabinet on Thursday, notes, "The restructuring of Montenegro Airlines is necessary, since the company is constantly producing losses and has a high level of debt". While the 185-page document says the carrier has significantly improved its operational results in 2018 and continues to perform well in 2019, it estimates the state will have to fork out twenty million euros to restructure Montenegro Airlines. According to the government's timeline, the restructuring should begin immediately, in 2019, and be completed in 2020.
The Montenegrin government began talks with a "German investment fund" in late 2018 over its potential takeover of the national airline. In February of this year, unnamed sources at the German turnaround fund 4K Invest, a part-owner in Slovenia's Adria Airways, said it had given up on purchasing a stake in Montenegro Airlines due to "both internal and external limiting factors". They added, "We had contact with [Montenegrin] government representatives but we do not see a sustainable way to make the company profitable. Debts are a major issue, as well as the current state of the aviation industry, both in Montenegro and abroad".
Montenegro Airlines registered a loss of 1.97 million euros in 2018. It represented the company's best result in ten years. "The strong, and often unfair, competition on the market, the high price of fuel, high aircraft leasing costs and the overhaul of aircraft engines, as well as inherited losses, in large part affect the company's performance", Montenegro Airlines said on Friday. It added, "Together with our majority shareholder - the government - we expect to complete the process of financial consolidation in 2019 and adopt a development strategy, which includes fleet renewal and organisational restructuring of the company".
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