Montenegro’s government is looking at options for the country’s troubled flag carrier as it struggles under a heavy debt burden.
Montenegro Airlines has accumulated significant debt over the past few years and, despite the government’s efforts to save it, the financial situation at the company has continued to worsen. Podgorica has been planning for years to privatise Montenegro Airlines (MA), but so far there has been no serious interest in the indebted flag carrier.
Now the government has questioned whether the flag carrier can become stable again and operate without accumulating new debt.
Podgorica plans to will prepare an analysis of the operations of its troubled flag carrier by the end of 2017 in order to seek a way to stabilise it, Finance Minister Darko Radunovic told TVCG on October 23.
“I think that Montenegro Airlines has to exist and I think that we only have to find a way to precisely and accurately know how much this costs Montenegro, what is its significance and what are the effects [from its operations on the economy],” Radunovic said.
He added that the government wants to keep the flag carrier as it has a significant impact on the economy.
“It transports some 45% of all tourists. Its importance is significant, but we have to see how economically justified its operations are,” Radunovic said.
In January, local media reported that most MA co-pilots took sick leave and refused to work after the company delayed paying their wages for November. In February, local media reported that the government had decided to give one last chance to its indebted flag carrier before declaring it bankrupt.
Montenegro Airlines is one of the country’s biggest state tax debtors. As of early February, its unpaid taxes on personal income and social security contributions amounted to €13.35mn. In July, the flag carrier reported that it had reduced its outstanding debt by €20mn in the past three years, but provided no other figures.