On Dec. 9 the Montenegrin government proposed a capital boost for the national air carrier Montenegro Airlines.
The capital boost will equal EUR155m over the next six years and will be used to cover the company’s matured obligations to creditors and investments in development, the government said after a session explaining that a net EUR50m had been allocated for buying new planes, Montenegrin Radio and Television has reported.
The government asked parliament to debate the legislation urgently, saying that the company must repay its debts and begin new investments.
The potential bankruptcy or liquidation of the company would lead to a series of cumulative adverse effects across the country’s economy, including the loss of 33.7 million euros in paid installments for aircraft and slots at foreign airports. Montenegro Airlines generates revenues of about 70 million euros per year and has a positive impact on the growth of Montenegro’s economy, the government added.
Montenegro’s flag carrier expects to handle 660,000 passengers in 2019, breaking last year’s record of 645,000. The company narrowed its loss to 1.97 million euros in 2018.
The government has been helping the national airline since it was founded in 1994. and, as media reported, in April this year, the government forgave the company four million euros in debt repayments.