Montenegro Closes Indebted National Airline

Montenegro airlines transport students during the pandemic. Photo: Government of Montenegro

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.

"The new government is reaping the fruits of trickery, in which the previous government and the company cheated each other for years and created a distorted picture for the public," Bojanic told a news conference.

"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."

The government, a coalition of three blocs, took power in early December, bringing to a close three decades of uninterrupted rule by the Democratic Party of Socialists, DPS. The government holds 41 of parliament's 81 seats.

In December 2019, the former DPS-led government announced it would invest 155 million euros in Montenegro Airlines over the next six years, warning that the bankruptcy or closure of the airline would have a major impact on the economy given its reliance on tourism.

But this year, the European Commission, the executive arm of the European Union, expressed concern over the government aid, saying that the case of Montenegro Airlines would be an important test of Montenegro's state aid control system.

On Thursday, Miodrag Vujovic, the president of the Council of the Agency for Protection of Competition, warned that low-cost airline Ryanair had appealed to the European Commission to investigate whether Montenegro Airlines had received more than 43 million euros in state aid.

"The European Commission now approves...