Just as the worst year in civil aviation’s history is drawing to a close, another carrier has ceased all operations and is going into liquidation. Montenegro Airlines, the flag carrier of the European country of Montenegro, has been shut down by the government of the small Balkan republic and stopped all flights on Dec. 26.

The company was the only Montenegrin airline, and it provided scheduled services to 21 destinations in 10 countries all over Europe from its hub at Podgorica, Montenegro, the nation’s capital. It was operating a small fleet of four aircraft consisting of three Embraer 195 and one Fokker 100. The carrier was also operating some routes out of Tivat Airport in Tivat, Montenegro, during the summer months to support the growing tourism industry that had recently developed some resorts on the coast of the Adriatic Sea, south of the Croatian town of Dubrovnik.

The last flight operated by the carrier was flight YM103 from Belgrade, Serbia to Podgorica which landed at 8:09 p.m. local time on Christmas Day. The Embraer 195 aircraft was saluted at the arrival airport with a water cannon from the fire brigade after the pilot was allowed to make a heart-shaped course in the skies, World Airline News reported.

Montenegro Airlines has posted a message on its website announcing the closure.

“Due to the new circumstances related to the decision of the Government of Montenegro not to support the existence of a national airline in the future,” the statement read, “and which has a very negative impact on the safety of continued air traffic, we estimated the risk at a level that Montenegro Airlines can not accept. We hereby inform you that as of December 26, 2020, we will completely suspend the planned traffic. The safety of passengers, crew and aircraft has been a priority for the company from its inception until today.”

The company had been founded in 1994 when Montenegro was still part of Yugoslavia, with the maiden flight taking place on May 7, 1997, to the Italian destination of Bari, just across the Adriatic Sea. Montenegro became an independent republic in 2006 following secession from Serbia through a popular referendum, which meant that all flights from Serbia to other international destinations could not be operated any longer, and had to focus its efforts on Podgorica.

No Profits in the Last Five Years

Montenegro Airlines has failed to turn a profit in each of the last five years, with net losses amounting to almost 50 million Euros ($61 million) during that period. In December 2019, the former government led by the Democratic Party of Socialists (DPS) committed to invest in the carrier 155 million Euros over the next six years, but the statement attracted the attention of the European Commission. The European Union has stringent rules on state aids to airlines, and since Montenegro has applied to become a member of the Union, it has to sustain the scrutiny of European authorities in Brussels.

This year a new coalition has taken power in Montenegro after almost three decades of DPS-led governments, and due to the mounting losses earlier in December, the newly installed executive has ordered the closure of the carrier, according to Balkan Insight.

Capital Investments Minister Mladen Bojanic said it would cost 50 million Euros to close the flag carrier and take up to nine months to create a new one.

“We plan to establish a new company with founding capital from the government,” he said. “We are well aware of what it means to shut down a company for this tourist season because it will take six to nine months to establish a new one.”

In the meantime, Podgorica Airport continues to be served by other European carriers, including ultra-low-cost airlines Ryanair and Wizz Air, both serving multiple destinations from Montenegro’s capital.

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Vanni Gibertini

Vanni fell in love with commercial aviation during his undergraduate studies in Statistics at the University of Bologna, when he prepared his thesis on the effects of deregulation on the U.S. and European aviation markets. Then he pursued his passion further by obtaining a Master’s Degree in Air Transport Management at Cranfield University in the U.K. followed by holding several management positions at various start-up carriers in Europe (Jet2, SkyEurope, Silverjet). After moving to Canada, he was Business Development Manager for IATA for nine years before turning to his other passion: sports writing.

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