Montenegro Airlines debt nears 70 million

Montenegro Airlines’ debt increases as practices of nepotism continue

Despite rising passenger numbers and ongoing cost cutting measures, Montenegro Airlines’ debt has reached 68.980.608 euros. The Montenegrin carrier owes the most to the airports in Podgorica and Tivat - up to 12.8 million euros, followed by 12.7 million to the Serbia and Montenegro Air Traffic Services Agency. In March 2012, the Montenegrin government agreed to write off some of the debt owed by its national carrier, however, the exact amount has never been specified nor has the government kept its promise. In addition, the airline has had to revise previous financial results after the State Audit Institution found the previous management covered up 2.5 million euros in debt by withholding parts of its losses from its financial reports.

The current management at Montenegro Airlines says it has gone to great lengths to cut costs and reduce the carrier’s debt. “All expenses have been significantly reduced especially when it comes to fuel, airport services and catering. In addition, expenses on business trips, accommodation, marketing and telephone use have been reduced. The number of seasonal workers has also been cut, pay checks have been modified and a decision has been made to close all unprofitable international sales offices”, the airline said. It added, “This way we have achieved significant savings in the second half of 2013 amounting to some 2.5 million euros, indicating the airline is on the right path”. Montenegro Airlines intends to launch flights to Dusseldorf next year and is expected to take delivery of a new Embraer jet in 2014.

However, despite attempts to cut costs, Montenegro Airlines’ management recently approved bonuses for various employees, all of which proved to be members of the ruling Democratic Party of Socialists (DPS) or family members of government officials. They include Commercial Director Predrag Marković, who is the son of Deputy Prime Minister Duško Marković, as well as Montenegro Airlines Agency Coordinator Gorica Lalićević, daughter of Duško Lalićević who is member of Montenegro Airlines’ Board of Directors and head of the Montenegrin Tennis Association, as well as a former Justice Minister in the government. In addition, bonuses have been approved for Marko Vukčević, Advisor for the Austrian, Swiss, Italian and Central European market, who is the son of former high tanking DPS member and now President of the Constitutional Court of Montenegro Mladen Vukčević. Bonuses have also been approved for Tijana Kavarić, head of the airline’s Media Center and wife of Montenegro’s Minister for Economy Vladimir Kavarić. Employees have expressed great dissatisfaction with the recent allocation of bonuses which almost exclusively went to party faithfuls. Meanwhile, the airline has named Vojin Vlahović as its new Exectuive Director. Mr. Vlahović has up until now been the Montenegrin Ambassador to Italy and has served as the advisor to the Prime Minister.