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Montenegro Airlines has ceased operations this evening with the company to be shut down. The carrier’s final commercial service was operated between Belgrade and Podgorica as flight YM103. The airline carried some ten million passengers over the past two and a half decades, with over 350 people losing their jobs tonight.

Montenegro Airlines suspended operations last night, leaving the country without key routes in the immediate future. The Montenegrin carrier transported 24.7% of all passengers flying to and from the country in 2019, its last full year of normal operations. It welcomed 657.416 passengers on board its aircraft and operated 7.798 flights. As of today, Montenegro no longer has nonstop services to France, Switzerland, Slovenia and Germany. Austria will also be left unserved once Austrian Airlines temporarily suspends its flights between Vienna and Podgorica, which are currently operating over the holidays and are not running on a regular basis due to the coronavirus pandemic. In addition, during the summer, the Montenegrin flag carrier exclusively served Copenhagen, Dusseldorf and Lyon from Podgorica, as well as Copenhagen, Leipzig and Hannover from Tivat.

Serbia was by far Montenegro Airlines’ biggest market, with the carrier offering 356.376 seats between the two countries last year. It was followed by Russia, France, Switzerland and Slovenia, which made up the top five markets. On the other hand, the airline’s busiest year-round service on which it faced no competition was Paris, with 42.894 passengers carried in 2019, followed by Zurich and Frankfurt. Montenegro Airlines served three of Podgorica Airport’s top five busiest routes in 2019 (Belgrade, Vienna and Ljubljana), as well as two of Tivat Airport’s top five busiest routes (Belgrade and Moscow).

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Photo Credit: Ex-Yu Aviation

Montenegro Airlines demise leaves market gap

As of this morning, carriers are yet to respond to Montenegro Airlines’ collapse, whose demise came suddenly. The ongoing coronavirus pandemic and low demand has reduced the need for any major and immediate response. Until last week, Montenegro Airlines was primarily flying only to Belgrade, with the majority of its remaining European network brought back recently for the holiday period at a low one to two weekly frequency. The Montenegrin government has announced it will form a new carrier within six to nine months, but warned the process would be complicated and long, and would likely have a negative impact on the 2021 summer season as capacity would not be replaced in such a short period of time. It further noted foreign carriers would use the void left by Montenegro Airlines to better position themselves on the market.

President of Montenegro, Milo Djukanović, noted, “Terminating a business is simple and quick, even if that business is a national airline company. But it can also be very risky and reckless, particularly in a nation that generates a quarter of its GDP from tourism and has not used even 50% of its potential in that industry. Indeed, it will not be able to use it if it does not become an easily accessible destination, which cannot be achieved without, among others, a national airline”.

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Photo Credit: Ex-Yu Aviation

The Minister estimates Montenegro Airlines’ bankruptcy will cost the country’s taxpayers at least fifty million euros. The company has been facing financial problems for the better part of its existence. In recent years, it was determined the carrier’s former management teams had falsified financial reports to show a profit. Furthermore, no benefits have been paid to its employees since 2016, while wages have been late since this September. At the same time, it has been found the airline had received much more state aid over the past few years than initially reported or accounted. Montenegro Airlines has debt amounting to 100 million euros and is expected to file for bankruptcy within days as it will no longer have sufficient funds for fuel and its aircraft may be repossessed due to debt owed to the likes of Frankfurt and Vienna airports. The Montenegrin carrier was founded in 1994. It operated its first flight on May 7, 1997, between Podgorica and Bari.