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The Montenegrin government is shutting down its national airline, burdened by mounting debts that left it dependent on state subsidies.
“We cannot take any decision that is legal … to extend the life of Montenegro Airlines,” Investment Minister Mladen Bojanic told a news conference on Thursday.
Procedures to close the company, which employs some 360 people, would cost around 50 million euros (R892 million) and should start “as soon as possible,” he added.
Bojanic also said the small Balkan country of around 600,000 people would aim to launch a new aircraft carrier in six to nine months.
Montenegro Airlines’ fleet consisted of four leased aircraft: three Embraer 195s and one Fokker F100.
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The company registered about 660,000 passengers last year, the highest number since it was established in 1994, according to official data.
Serving around 30 destinations around the world, especially during the summer season, it had annual revenues of € 70-80 million, but still had to go into debt to keep flying.
That left the company vulnerable when the coronavirus pandemic wiped out air traffic this year.
In January-September, Montenegro Airlines’ revenue fell 80 percent compared to 2019.
A 155 million euro rescue plan decided in December last year had to be abandoned after Irish airline Ryanair complained to the European Commission.
Montenegrin President Milo Djukanovic, whose party lost the August legislative elections for the first time in three decades, denounced the shutdown as a “populist” decision.
“Closing a company is simple and fast, even if it is the national company. But it can also be very risky and reckless, especially in a country where a quarter of GDP is generated in the tourism sector,” Djukanovic said.
