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Montenegro’s Agency for the Protection of Competition has launched an investigation into whether state aid granted to flag carrier Air Montenegro is in line with European Union state aid rules. The watchdog said, “The agency, in its endeavour to accurately and comprehensively ascertain all the facts, is initially investigating whether the payments made by the Ministry of Maritime Affairs and the Ministry of Finance towards the founding capital for the establishment of ToMontenegro [Air Montenegro’s registered name] conform to the stipulations of Article 107(1) of the Treaty on the Functioning of the EU, as well as whether there is economic continuity between Montenegro Airlines and ToMontenegro. The Ministry of Finance has already provided the necessary data and following the submission of the required information by the Ministry of Maritime Affairs, the Agency will undertake a thorough analysis and subsequently convene an hearing”.
The watchdog anticipates concluding the investigation by the end of the second quarter of this year. Based on publicly available information, the Montenegrin government initially invested thirty million euros into Air Montenegro, 22 million of which were used for the acquisition of two Embraer E195 aircraft previously operated by Montenegro Airlines. In late 2022, Air Montenegro formally requested a financial injection by the state, to cover losses generated by the winter season, as well as to expand its fleet. At the time it warned it would face liquidity issues if it were not granted the undisclosed funds. The Montenegrin government shut down the country’s former national airline, Montenegro Airlines, after the Agency for the Protection of Competition found that aid granted to the carrier was illegal.
The European Commission’s annual progress reports for states aspiring to join the European Union, published in November last year, noted, “Montenegro achieved a good level of alignment with the EU acquis. Before transition to the second phase of the European Common Aviation Area Agreement (ECAA) is possible, competition and state aid requirements need to be fulfilled”. It had also previously stated, “In December 2020, Montenegro Airlines permanently stopped its operations following the decision of the state aid authority that declared the state aid to the airline illegal. In January 2021, the government established a new national airline branded “Air Montenegro”, which started operations in June 2021. Any economic continuation should be eliminated between these two companies in line with competition and state aid rules”.
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