El Al in Montenegro bid

Podgorica Airport soon part of El Al Israel Airlines Limited?

The national carrier of Israel, El Al, is interested in taking over, together with the European Bank of Reconstruction and Development (EBRD) some 30% of shares of Montenegro Airlines which have been put on sale by the Montenegrin government. Montenegro Airlines CEO, Zoran Đurišić, confirmed the news saying that negotiations between the two begin today when the El Al president in charge for the European market visits the airline’s management in Podgorica. The officials from the two companies will discuss business results in the last few years, development perspectives of Montenegro Airlines and passenger and flight security systems. If El Al is successful in its bid it would become a minority shareholder with the government still a majority holder of shares. However, the government has said it would sell most of its shares within the next few years if the new partnership proves successful which would allow El Al to become a majority owner. El Al, however, is conditioning the Montenegrin government, as it also wants to buy Podgorica and Tivat Airport, rather the company “Airports of Montenegro”, which controls Montenegro’s two international airports. This could prove as an obstacle as the government has no plans to sell this company which has been reasonably profitable in the last few years.

Montenegro Airlines CEO also stated that Montenegro Airlines recently adopted its 2008 financial report where it was established that Montenegro Airlines has operated with a total loss of 701 thousand Euros. In his words, Montenegro Airlines has made an unprecedented financial turnover of 61 million Euros, which is 15 million Euros more than in 2007. “We shouldn’t forget the fact that last year was a year of crisis in the air transport industry when many companies went bankrupt. Some of the companies in the region registered losses of up to 20 million Euros”, Đurišić explained declaring that the International Air Transport Association (IATA) published information of a 5.3 billion Euros overall loss amongst world carriers. Đurišić claims that, despite the losses, Montenegro Airlines is a stable company and until now it has not asked for help from the government. “We are implementing a special-purpose plan of cutting expenditures for a couple of months. There was a 20% salary cut, representatives from various countries were withdrawn and business travels have been minimised. By cutting all these expenditures we have managed to remunerate the existing losses”, he emphasised.

El Al Israeli Airlines operates to 45 destinations and is widely acknowledged as the world’s safest airline. Although sometimes criticised, the airline has air marshals on all flights, rigorous passport and baggage checks at airports while most new aircraft have an anti missile protection system which defends the aircraft from potential missiles. The carrier operates with a 37 member all Boeing fleet. El Al also has its own cargo division and owns the charter airline Sun d’Or International Airlines.