The Montenegrin government has said it is “working day and night” in order to establish a new national carrier to replace Montenegro Airlines which ceased operations last Friday. However, it has warned the process could take up to nine months and may have an impact on next year’s summer tourist season in the country. Montenegro’s Minister for Finance, Milojko Spajić, said, “We are working day and night on establishing a new airline. We have formed a task group which is dealing with this matter on a daily basis. We expect to establish the airline as soon as possible. However, there are some limitations which are out of our control, such as the time needed to obtain necessary permits and licenses. We will try to make an incentive for some of Montenegro Airlines’ employees to move to the new airline. Whether we will succeed or not remains to be seen. Three ministries are jointly working on establishing this new airline. Our goal is for it to occur by the summer, but it is very difficult to give an exact estimate when the carrier will launch because there are so many variables which we can’t control”.
The Minister noted the new Montenegrin flag carrier will have to be profitable unlike its predecessor. “We will provide the initial capital in order to establish the new airline. The amount we invest will depend on our calculations. We have put aside up to thirty million euros for the new company in next year’s budget. Of course, we won’t invest all of it, rather, we will rationally think through how much money is realistically needed to establish the airline and which routes will be sustainable. The money we invest into this new company, which are taxpayer’s money, will need to be a sound investment on which we will get a return”, Mr Bojanić said.
The Montenegrin government will enter into talks with some European airports to which Montenegro Airlines maintained flights in order to retain slots. “We will do our best to keep Montenegro Airlines’ slots at European airports. We will enter into talks with our European partners and their airports. The idea is for the new carrier to simply take over the slots on routes which are deemed viable. The new airline must be sustainable, or it won’t exist. We can’t establish a new company just for the sake of having a carrier, which would operate on the same principles as Montenegro Airlines”, the Minister said. He added, “Concerning Montenegro Airlines’ fleet, the majority of its aircraft is on operational lease. There is one financial lease for an Embraer jet which we will negotiate with the manufacturer and see what happens. Due to the current situation on the market, acquiring new aircraft outright could be more beneficial and cheaper in the long run than financial leases. We are already in contact with consultants which will determine the best way forward”.
New airline with just 30 million euros?? Good luck with that.
ReplyDeleteMy thoughts exactly. My guess is that they will just use the 30 million to finance foreign carriers next summer after which they will bury this whole idea of YM 2.0.
DeleteWhy not? Do you think they'll be paying in cash for a fleet of A380s? You can get a pretty good leasing deal on pretty much any aircraft at the moment. Coupled with cheap crew, fuel and desperate airports, it doesn't get any cheaper setting up an airline.
DeleteDepend how big plane and fleet you want. Company can be with just 2 ATR. In this case, permits, organization, 2-3 used ATR, some money to keep them in very good shape, 30 mil is more than enough. Small country, small airplane, small fleet. For summer season they can wet lease something bigger when it need. And in this case they can be profitable (exactly not to be in minus), megalomania will kill everybody...
DeleteGood luck to Air Slovenia and new Montenegro Airlines next year
ReplyDeleteBoth should hire Xfly to start the companies. Like Nordica used Adria to get started. Fast and easy. Start with virtual carriers and develop from there
DeleteI don't think they have any plans to set up a new airline. It's just talks. In the dnf they will say its better to use the 30 million to fund LCCs.
ReplyDeleteThat would be the best solution.
Delete* in the end
DeleteI don't agree, it's still much cheaper to have your own carrier than paying foreigners to fly some routes.
DeleteWhatever airline they create it will be money loosing. There is just no point.
ReplyDeleteYeah, better to pay a foreign carrier to fly to Montenegro. Wait, that's the same as paying a local airlines doing the same job as a foreign one. Go figure.
DeleteMoney is not a problem.
DeleteFinding jobs for a new group of political people, brothers, sisters, lovers...is a priority for every new balkan republic party in power. Do not underestimate that factor in the equation, ever.
So, yes, MGX 2.0 is realistic.
+1000
DeleteExactly my thoughts few days ago when I first read YM shutting down for the new one to start.
Which routes would be realistically profitable for them? BEG, VIE?
ReplyDeleteI think only BEG and charters in summer.
DeleteBEG, VIE, FRA, MUC, ZRH, LJU
Delete^But that's pretty much YM's network
DeleteWith exception to MUC that is Montenegro Airlines' network.
DeleteMontenegro Airlines was more like Belgrade Airlines. 80% of their flights were to BEG. The rest were a couple of weekly flights here and there to a few countries in western Europe.
DeleteCrna Gora, similar to Serbia, rely on Switzerland and Russia. Those are the main markets.
DeleteMontenegro Airlines had very few flights to Russia. It only flew it seasonally from Tivat just 4-5 times per week in the high season. Zurich was only served from Podgorica with maximum of 6 weekly flights in the highest season.
Delete@9.44 no, the main market from Montenegro was and is Serbia. No other market comes even close.
DeleteOf course, Serbia is what kept them going for this long. No other destination came close, I mean Paris maybe was number two with 3 weekly flights.
DeleteVery amateur approach. No surprise since the minister is 32.
ReplyDeleteHe talks more sense on aviation then most other ministers with his portfolio in other ex-Yu countries.
DeleteWhat happened with Daliborka? I think she can be given a second chance?
Deletehaha Daliborka is hard at work in the parliament. She is an MP.
DeleteWhy open up a new airline when LCCs can open up a number of destinations instead?
ReplyDeleteMany people thought that would happen in Ljubljana but as we see...
DeleteSlovenia and Montenegro are quite different - economics, emigration, tourist potential, non-airline connectivity to Europe, geographic position, etc.
DeleteConsidering that, we might expect slightly different outcome.
If you will pay then they will fly. But from that perspective it's much better to have your own national carrier where people will pay taxes in MNE so at least you get some money back...
DeleteWhat will they call it?
ReplyDeleteAir Montenegro?
DeleteCrna Gora Airlines :D
DeleteWhy not Montenegro Airways.
DeleteMontair as their original callsign.
DeleteThere already was "Air Montenegro" with little YAK-40 leased from Bulgaria, I think it was the early 90s, just before a war or so.
DeleteYesterday some businessman offered to buy YM for 1 euro if the government wrote off all the debt. The government rejected his offer.
ReplyDeleteThey told him that they can't write off the debt. It's not possible to do that.
DeleteRidiculous proposal. Write off both public and private(!) debt and hand the company to him for free and all is good? Milo's mafia gang going on and about, nothing to see here.
DeleteAgree with above anon. The government said the proposal was politically motivated and had nothing to with common sense.
DeleteI wonder what will happen with the Montenegro airports concession now that YM is gone. Will there be any interest left?
ReplyDeleteThat whole process has been handled very badly. I think it would be crazy to give the airports up for concession now in this economic climate.
DeleteThey really shouldn't waste their time with it. In 2 months no one will remember Montenegro Airlines anymore.
ReplyDelete+1
DeleteSame thing we heard about JP more than a year ago and you can see that people are still talking about JP everyday...
DeleteGood riddance to this vulture of a company. Don't create another one.
ReplyDeleteI'm sure Wizz Air and Ryanair will take over the majority of YM's routes.
ReplyDeletelike they did after JP demise, don't be foolish. If you will pay them they will fly. Otherwise you will travel by car, as we Slovenians have to do.
DeleteSome routes will be lost for good be there a new airline or LCCs take over. I don't see Podgorica-Lyon or Podgorica-Ljubljana coming back anytime soon.
ReplyDeleteAirlines should react quickly so they don't allow a potential new airline being created (which wouldn't suit them). Swiss/edelweiss should really consider launching TGD.
ReplyDeleteThey tried and failed a few years ago.
DeleteCircumstances have changed now. There is no MGX.
DeleteBut there is corona
DeleteJP flew to ZRH 3x per day and what happened after JP demise? For few month's this routes was even unserved and then LX came with 1 flight per day (and even that was in the middle of the day so connection flights were impossible). As soon as first news of Covid reached EU, LX immediatelly canceled flights so that's reality. Don't expect LX there even when situation get better.
DeleteSlovenia scenario all over again.
ReplyDeleteTwo very different markets so I think we will have different outcomes.
DeleteI wonder who these constants are.
ReplyDeleteAbsolutely no chance in hell a new airline can be up and running by summer 2021.
ReplyDeleteAgree. And by the time summer passes, they will come to the conclusion that a new airline is not needed and that the market has taken care of itsel.
DeleteLike it was care in Slovenia right?
DeleteThey seem determined to create a new airline.
ReplyDeleteYeah dedicating 30 million (peanuts in aviation) shows real determination...
DeleteMontenegro's financial situation at the moment is very bad. The country just avoided bankruptcy. Where should they find more money?
DeleteRetain 1 Embraer and fly only TGD/TIV - BEG. It's the only viable route and the only one that will bring profit.
ReplyDelete+1
DeleteIt would make most sense, at least for the first year or two and then think about expanding.
DeleteAnd it also makes the most sense in terms of the money the government is prepared to invest.
DeleteOn the one hand, I agree that only the BEG routes seem to make sense (maybe with the Dash 8 aircraft, like OU?), but on the other hand, it is absolute madness to set up a separate airline with such a small operation. The administration will be proportionately huge and the cost efficiency therefore terrible. Also, for every flight, would you have both crew operating the flight and an extra set of standby crew (=very expensive)? If not, who will choose to book with the notoriously operationally unreliable airline that has no operational margins at all? Prepare for enormous losses to continue.
DeleteThat's why tiny YM, with only four aircraft, was if not the biggest then among the biggest economic jokes among Europe's airlines. Setting up another small airline is just continuation of that.
I'd say either let the idea of a new airline die and let the market ensure that capacity will be there to serve the demand, or investigate the possibility of an existing airline being subsidised to operate an important route or two.
I think once they put everything on paper that is what they will do, let the idea fade away like morning mist over Boka Kotorskа/Бока Которска.
DeleteDaju po 1 mil. godišnje JU i imaju prevoznika za narednih 30 god. JU odleti ujutru oko 6H BEG-TGD, naparavi 2-3 rotacije iz TGD do VIE,CDG,FRA... i uveče se vrati za BEG.
ReplyDeleteGlupost, šta če ti letovi do VIE,CDG,FRA ako su usred dana i nemaš mogučnosti povezivanja sa ostalim kompanijama? Osim onaj prvi let oko 7 ujutru do nekog huba bio bi prihvatljiv, svi naredni letovi bi bili samo za P2P putnike..
DeleteSa CDG imaš i večernje preko okeanske letove kao i lokalne šerom Francuske a JU ima odličnu saradnju sa AF. Sa po dve rotacije 2-3 dana nedeljhno može biti uspešno.
DeleteIma konekcija naravno ali ih je mnogo manje nego u jutranjim časovima. To se primetilo i kod propada JP kad ljudi moraju čak i da prespavaju u FRA/ZRH/MUC kako bih uhvatili svoj let naredni dan. Ako imaš ujutru i naveče letove onda tih problema nema.
DeleteS obzirom da je svrha aerodromu da radi i zaradi, ne bi bilo lose kada bi aerodrom u Podgorici makar 2x nedeljno radio i preko noci (petak/subota i nedelja/ponedeljak).Taman u 00:30 iz BEG za TGD i u 04:15 iz TGD za BEG. Tada bi bio resen problem jutarnjih konekcija.
DeletePostoji više kombinacija samo se nadam da više ne postje političke prepreke da JU raširi krila u Crnoj Gori.
Deletegood luck!
ReplyDeleteNo chance this will work
ReplyDeleteSlovenia, learn from Montenegro! We're more than a year out since Adria's demise and we're still not any closer to Air Slovenia.
ReplyDeleteSlovenia has plans for Air Slovenia, just have to submit it to EU, and i hope they will give it a green light
DeleteFirst they need to send investment plan to EU, I believe that they still did not do that, or am I wrong?
DeleteThey didnt send it yet.
DeleteI don't know what they are waiting for..
DeleteIn order to protect 30 million investment in a new airline, what can government or an airport do to prevent LCCs now from opening new routes?
ReplyDeleteThey are not going to prevent LCCs from opening new routes and neither are they allowed to prevent LCCs from opening new routes.
DeleteNew airline...Montenegro keeps winning))
ReplyDeletebetter to spend that 30 million on paying off our debts than wasting it on another airline. regards from Podgorica!
ReplyDeleteWhat about the refunding of the tickets sold but flights cancelled due to Covid?
ReplyDeleteIs there any plan to refund?
to at least partially protect travelers who plan to buy tickets, as well as those who already have them. The very next day, the account from the Tax Administration was blocked. We did not have the opportunity or time to apply the procedure of taking care of passengers to the final destination, another route and another airline, which is the procedure in cases of flight cancellations. As of Friday, December 25, the company has no funds in the account with which it could refund any purchased and unused tickets. In addition, the partner companies have decided not to accept passengers with our tickets on their flights, so the so-called involuntary reruting procedure cannot be applied.
DeleteWe fully understand the dissatisfaction and negative reactions regarding the current situation and we do everything to get the opportunity and opportunity to take care of passengers in the manner prescribed by the rules in air traffic. Passenger lists from canceled flights have been saved, so we hope that the company will be able to offer you a replacement for other dates or a refund in the coming period. Unfortunately, for the first time in 23 flying years, we have betrayed your trust.
But this is a stereotape response and not helping the customer who bought ticket in Aıgust and then YM Airlines cancelled the flight!!
DeleteYM neither refunded nor provide a new flight since August- more than 4 months ago.
This is literally a Robbery !
Shall I sue? or any other alternative way you recommend to get our money?
Postovani,
ReplyDeleteNeizmjerno nam je žao što ste se našli u ovakvoj situaciji. Kako su, kao posljedica najskorijih dešavanja sa kojima ste upoznati iz medija, poslije 26 godina, avioni naše kompanije prizemljeni, a planirani letovi otkazani, u obavezi smo da pokušamo da bar u određenoj mjeri pojasnimo situaciju u kojoj se svi trenutno nalazimo.
Za nas je ovako radikalna odluka Vlade Crne Gore bila neočekivana te nismo bili u mogućnosti da pravovremeno obustavimo prodaju i otkažemo letove, kako bismo bar donekle zaštitili putnike koji planiraju da kupe karte, kao i one koji ih već imaju. Već sljedećeg dana uslijedila je blokada računa od Poreske uprave. Nijesmo imali mogućnosti niti vremena da primijenimo proceduru zbrinjavanja putnika do krajnje destinacije, drugom rutom i drugom avio-kompanijom, što je inače procedura u slučajevima otkaza letova. Kompanija od petka 25. decembra nema sredstava na računu kojima bi mogla izvršiti refundaciju bilo koje kupljene, a neiskorišćene karte. Dodatno, partnerske kompanije su donijele odluku da ne prihvataju putnike sa našim kartama na svojim letovima, tako da tzv. involuntary reruting procedura ne može biti primijenjena.
U potpunosti razumijemo nezadovoljstvo i negativne reakcije koje se tiču trenutnog stanja i činimo sve da dobijemo mogućnost i priliku da zbrinemo putnike na način koji je propisan pravilima u avio-saobraćaju. Liste putnika sa otkazanih letova su sačuvane, pa se nadamo da će kompanija u narednom periodu biti u mogućnosti da vam ponudi zamjenu za druge datume ili refundaciju. Time smo nažalost po prvi put za 23 letačke godine iznevjerili vaše povjerenje. Kompanija razumije i saosjeća sa svim putnicima kojima je ovo izazvalo ogromne neprijatnosti i štetu.
Uz izvinjenje, zahvaljujemo se na razumijevanju i nadamo se skorom rješenju ove teške situacije za sve nas.
Srecni praznici!
Vaš Montenegro Airlines!
Next year could see Ryan and Wizz starting services from Montenegro to a couple of new destinations. They could also ask EC to force competition on Serbia-Montenegro services. Those two actions could render creation of a new national airline pointless.
ReplyDeleteIf new government is serious about this new airline they need to move quickly and preempt negative actions, otherwise TGD&TIV will become SKP&OHD 2.0 by 2022.
great another airline for the poor citizens of Montenegro to subsidize.
ReplyDeleteLets hope Air Montenegro will resume flights to CDG and LIS. LIS did not get a chance to mature as a destination.
ReplyDeleteAre there very strong business links between MNE and PT or what's the rationale? It's an eyebrow raising route of no apparent logic to me. At some 1,300+ nautical miles, it requires high yields and load factors to cover its costs.
DeleteMore and more Balkana capitals are being connected to LIS. There is an increasing demand because it's a new market for Portuguese. I am pretty sure the previous YM did some research before launching the route!
DeleteYou do realize this route never launched?
DeleteLet's take a glance at the debts listed under the Lex MA bill:
ReplyDelete25M - tax and social contributions debt
9M - what YM owes Montenegro from previous treasury cash infusions
32M - debt to ACG
6.5M - debt to SMATSA
6.8M - debt to Hipotekarna Bank
6M - debt to suppliers
2020 adds at least:
1.2M - aircraft lessors of E195s
0.6M - engines on E195s
0.5M - Belgrade Airport
0.160M - Eurocontrol
So, the money saved is essentially the tax debt owed. The strategy might be to bankrupt YM physically to make the tax debt and state aid go poof. I haven't seen anything about the amount of back salaries owed.
The risk is that the tourism sector can't handle two bad years in a row without significant damage. If the new government doesn't want to be one and done, then this situation will have to be handled very carefully. The airlines are not going to be themselves in 2021 either.
Personally, I think that YM is viable if run properly (250 employees max). If you lose another tourist season, there will not be money in the budget for a new airline. The money in Slovenia's budget for a new airline is supposed to be $70M. I have had people suggest I am crazy for saying that the two countries should work together on this project. However, $100M between the two should provide enough scale for an airline to be successful.
"I have had people suggest I am crazy for saying that the two countries should work together on this project"
DeleteWhat two countries? Slovenia and CG have no common interest, no wonder people would say that. CG and Serbia, that is a different story: common interest and perfect match for a joint airline.
Your reasoning about the tourist season seems to suggest that YM was a relevant player for bringing tourists to Montenegro. What do you base that on?
DeleteYM's fleet consisted of regional jets with a unit cost too high to be suitable for that market segment. Also, look at the rapid passenger volume growth at the two Montenegrin airports over the last few years. How much of that growth can be attributed to YM?
"YM's fleet consisted of regional jets with a unit cost too high to be suitable for that market segment. Also, look at the rapid passenger volume growth at the two Montenegrin airports over the last few years. How much of that growth can be attributed to YM?"
DeleteDefine "too high". Not all tourists want to fly FR and W6. Profit in the airline business does not just mean offering the absolute lowest price. It means being able to bring in people that want to spend money at a price point that makes you money. That is not a simple thing to do, but it is why the network carriers still exist despite the fact that LCCs are more widely available than ever. McDonald's has cheaper costs than most restaurants, but the two can co-exist.
"Your reasoning about the tourist season seems to suggest that YM was a relevant player for bringing tourists to Montenegro. What do you base that on?"
The fact that YM has not done that as much as it could doesn't mean that it cannot do that. If your power company is incompetent, does that mean you don't need electricity?
Aviation is a key part of the economy because business flies and people with money fly. If people with business and money cannot fly to your country in a timely fashion, you are going to always be an afterthought. In this environment, the focus is going to be on getting people to vacation closer to home. That makes 2021 a complicated affair. Nothing beyond 60 days out on the schedule is confirmed. MNE is going to have to BRING people in this year with a robust marketing campaign and guaranteed connectivity and that won't be cheap. Every country with summer resorts are already planning massive ad campaigns and programs to bring people in to spend money. Losing YM is giving them one less tool to do it and they will be at the mercy of the priorities of other people.
That is not to say that today's YM is the right tool, but it would be easier to restructure the airline than to go start a new one (especially when you still owe the old employees money). If tourism is 25% of GDP, then tourism would generate more than 30M euros that would be saved in bankruptcy.
as far as i know slovenia is planning 140mio for new airline. only half would come from state, the other one from private sector.
Delete"as far as i know slovenia is planning 140mio for new airline. only half would come from state, the other one from private sector."
DeleteThat sounds unrealistic on their part if true, but maybe it is just me.
"as far as i know slovenia is planning 140mio for new airline. only half would come from state, the other one from private sector."
DeleteWho from Slovenia's private sector is going to invest 70m EUR in an airline? Solinair?
140mio? I only know for 76mio from EU
Deletewho said it should be private sector from Slovenia? it was in the media - one half from the state and the other half from strategic partner (probably from aviation sector). But those are just words from politicians. maybe because this is the only way EU would approve new airline?
DeleteSo which aviation company outside of Slovenia would in Covid-world be interested in "investing" in a flag carrier with an extremely small and limited market, that is bound to be perpetually loss-making?
DeleteSince YM 2.0 can't make it to summer 2021 then their competition will step in. After all we already got LH in TIV last year. This year whatever demand there will be will be taken care of by foreign carriers.
DeleteAnonymous02:21 - you do understand i am not saying this will happen? I am just saying what was said in the media.
DeleteDoes anyone know what the basis was for the connecting flights from the destinations Montenegro airlines flew to Paris, Frankfurt etc. - did Montenegro airlines have codeshare or interline agreements with any airlines for onward flights?
ReplyDeleteYM accounts have been blocked since Friday, companies collected €3.2 million. If was on the news tonight.
ReplyDeleteI hope that the Montenegrin government will make sure that ALL YM customers are refunded, even if the money has to be paid for out of the treasury.
ReplyDeleteI understand the aggressive move on the bank accounts to ensure that money isn't stolen, but it isn't just about forming a new airline. If some future passengers lost their money during the shutdown of Montenegro Airlines, the next airline has no chance.
I also agree that any new investors should put in something to make sure the airline works. If Savannah really wanted YM, they should have offered to absorb the tax debt. Between the taxes and the treasury infusions prior to 2019, that is already 32M that will not be recovered. Airlines where the new owners have put no resources in do not get run very well.
Montenegro has got its national airline and its called AirSERBIA.
ReplyDeleteStation a few planes in Podgorica and problems sold. Establishing a new airline is just foolish.
Exactly, problems sold.
DeleteBase a few planes in TGD? Where would these few A319s fly to? JU just needs to boost flights as it already did and then maybe operate some summer charters out of Tivat. They can easily base two A319s in summer.
DeleteBase the planes for now and take over only the busiest routes. The pandemic is near the end and they should be ready. Next summer JU could have a solid base built from Podgorica and Tivat...
ReplyDelete