State to rescue Montenegro Airlines with €155 million
The Montenegrin government has drafted legislation “for the investment and consolidation of the national carrier” which foresees the allocation of 155 million euros to Montenegro Airlines over the next six years. The draft law, which will be introduced into parliament under urgent procedures, is aimed at preventing the indebted carrier from collapsing and going into bankruptcy. The government noted that 105 million euros will be used to cover the airline’s debt, while fifty million will be utilised for the acquisition of new aircraft. The state emphasised that the bankruptcy or closure of the airline would have a negative impact on the Montenegrin economy and its tourism sector.
Under the six-year plan, Montenegro Airlines is expected to post a profit in 2020 and remain profitable for the duration of the state aid package. Furthermore, the carrier will be required to reduce its workforce by 2023 from the current 358 employees. The company aims to carry between 700.000 and 750.000 passengers per year between 2020 and 2023. “The draft law for the investment and consolidation of Montenegro Airlines is not a rescue package. Instead, it is an investment in the development of Montenegro”, the country’s Minister for Transport and Maritime Affairs, Osman Nurković, said. He added, “Being fully aware of carrier’s importance, the Montenegrin government has prevented its bankruptcy and closure. All our calculations point that its collapse would have extreme consequences, while the benefits of investment are far greater. This decision was not made lightly or quickly, however, based on the analysis of the company’s operations over the last three years, I am sure we have made the right choice”.
The Montenegrin government has already allocated 21 million euros for Montenegro Airlines in 2020 under its state budget for next year, which is irrespective of the abovementioned draft legislation. The Montenegrin carrier will add an Embraer E195 jet to its fleet at the start of the 2020 summer season and has completed tender procedures to select the most affordable dry-lease option. During the January – November period, Montenegro Airlines handled 626.297 passengers, representing an increase of 2.2% on 2018. The carrier is expected to register its busiest year on record and surpass last year’s result when it welcomed 645.000 travellers on board its aircraft.
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