Montenegro Airlines warns of possible grounding
Montenegro Airlines has seen its revenue tumble since the start of the 2020/2021 winter season as new restrictions and lockdowns are imposed across Europe, with the carrier’s employees still to receive their October wages. “Since the start of the winter season, the crisis has accelerated and the little revenue we had has been further reduced. Up until today, we have been unable to pay for October’s wages. We also have outstanding payments for aircraft leases, engines and debt towards suppliers. We are doing everything we can to decrease expenses, however, the reduction in revenue and expenses are not proportionate to each other”, the company told the “Vijesti” daily. It added, “In these circumstances, and without state aid, we are unable to continue operations, even in the short-term. If a company such as Lufthansa has requested and received state aid, then what can be said for us. Since August 31, we have not received any state funding”.
Montenegro Airlines was granted 10.4 million euros in July and a further 25 million euros from the state in August in order to maintain liquidity. However, the carrier has not received funds since. The Montenegrin competition watchdog is still studying the legality of a state aid law “for the investment and consolidation of the national carrier” which foresees the allocation of 155 million euros to Montenegro Airlines over a six-year period. The legislation was adopted late last year and foresees a wide-ranging restructuring of the company in return for funds. Montenegro has had a caretaker government since September with a new cabinet expected to be sworn in over the coming week. The new government’s strategy for Montenegro Airlines remains unknown.
The Montenegrin carrier has warned it may be forced to ground its fleet if the state aid law is not enforced and if it fails to receive any funds to cover the losses accumulated during the ongoing coronavirus pandemic. “In this case, foreign carriers would not rush to boost their flights and would be able to increase their fares. The best example of this is Slovenia, whose government, following the collapse of its national carrier, has been forced to give away millions in subsidies to foreign airlines in order to maintain a few flights. Small countries must invest in their aviation sector”, the carrier said. Montenegro Airlines registered a net loss of almost eight million euros in 2019, while its debt stood at 97.7 million euros.
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