The board of directors of the state airline "ToMontenegro" was constituted on Friday, when it held the first session of the new convocation, after the previous board was "in resignation" for ten months due to the resignation of the then president. Filip Radulović who became the director of "Montenegro Works" at the end of October last year.
At the constitutive session, the new board of directors, which was appointed by the government last week, did not make any decisions, only the election was confirmed Pavle Ljesar for chairman of the board. Other members are Vukadin Stojanović, Orhan Hodzic, Suad Đelović i Mirko Škerović.
The board members requested that the business documentation of the company from its foundation to the present be delivered to them, so that they could review the company's operations and prepare for new decisions and plans for the company's recovery.
The next meeting of the board will be at the end of this week, and several important decisions will have to be made already then. To the current acting director Dragani Frantov Nikolic that mandate expires at the beginning of October, and she told the board of directors that she does not want to be extended nor is she interested in the position of director, but that she would like to return to her previous job in the commercial sector of the company. She was appointed acting CEO after being the previous executive director at the end of February Predrag Todorović resigned.
According to the company's statute, the executive director is chosen by the government, so the board of directors should propose to the government a candidate for the new acting director in the next ten days and start the procedure for announcing a new advertisement for the election of a full-term executive director.
Also, an urgent issue concerns the purchase of the airplane "Charli", which flew for "Montenegro Airlines" (MA) until almost two years ago. It has been "lying" in front of the hangar of this former company since December 26, 2020, since part of the equipment was removed from it.
This "Embraera E-195" was purchased by "Montenegro Airlines" from the Brazilian "Embraer" in 2010 with the help of a loan from the state Brazilian bank BNDS and registered under the designation (40-AOC). Most of the loans have been repaid in the amount of about 38 million dollars, and the remaining amount of the debt is estimated at about five million dollars.
Representatives of the Brazilian Government and "Embraer" were in Podgorica last week, where they toured, photographed and determined the condition of the plane. MA bought the plane from them with a technical guarantee from the Ministry of Transport of Montenegro, that they can come and pick up the plane and that it will be returned to them in a technically sound condition if MA stops repaying the loan installments. Because the plane is now defective and "damaged", the Government can pay substantial compensation.
Because of this, the delegation talked with the representatives of the ministries of finance and capital investments in the past few days, in order to resolve the dispute by having the government buy the plane for the remaining amount of the debt. MA stopped paying installments two years ago. In 2010, the Government did not provide a financial guarantee for the loan for the purchase of the plane, which is why MA paid off the installments at higher interest rates.
The government could make a decision on the purchase of this plane as early as this week, and it would then be overhauled in order to get the necessary registration documents again and be able to be included in traffic. After the purchase, the Government would transfer the plane to "ToMontenegro", but it is necessary to examine how it would be best to do so. One of the models is to recapitalize with the plane "ToMontenegro" with a certain amount of money in order to be able to overhaul it and bring it to the so-called airworthy condition. After that, the company would no longer need to lease other planes because it would have its own three operational planes.
Since 2013, the former airline "Montenegro Airlines" has received 80 million euros of direct state aid or payment of money for losses without giving reasons. Tens of millions of euros ended up in the company in various indirect ways. At the time of the cessation of flights in December 2020, the company had debts of 120 million euros, and had a negative value of minus 60 million euros. Now the goal is that "ToMontenegro" does not go that way.
Since the beginning of the year, "ToMontenegro" has transported 240 passengers and has flights to 16 destinations.
Urgently needed recovery plan
"ToMontenegro" ended last year with a loss of five million euros. It was founded in February and began commercial flights in mid-June. The losses have continued this year, and the main reason is that fuel has risen in price by about 100 percent compared to the beginning of last year, without increasing ticket prices. The problem is that they leased a plane for the needs of the tourism industry, but it was not profitable for the company.
Therefore, the new board of directors should soon propose to the Government a plan for the recovery and future operation of the company.
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