The governments of Brazil and Montenegro are currently working together on a solution for the Embraer E195 aircraft which was damaged after someone allegedly stole some of its parts from Podgorica airport.
Montenegro Airlines has still not repaid its debt for the purchase of this plane, but the airline is now bankrupt. Its successor, Air Montenegro, cannot use the plane because its certificates have expired. And the Brazilian bank that owns the E195 does not want to take it back because it would have to pay to make it fit to fly.
Montenegro Airlines debt to Embraer
In 2010, Montenegro Airlines purchased an Embraer E195 jet from Embraer with the help of BNDS, a Brazilian state bank. The plane is known as Charlie because it was registered 4O-AOC.
Montenegro Airlines paid $38 million for this E195 through a loan. However, only $33 million had been repaid at the time of its bankruptcy, leaving $5 million remaining to be paid. Last week, a delegation from the Brazilian government arrived in Montenegro to solve this problem. They were at Podgorica Airport (TGD) to inspect and photograph the E195.
Air Montenegro is the successor of Montenegro Airlines and inherited part of its Embraer fleet. Photo: Getty Images
The plane is damaged
In December 2020, Montenegro Airlines stopped flying because the newly elected Montenegrin government decided to close it. In April 2021, the company officially declared bankruptcy, clearing the way for BNDS to recover the aircraft due to the $5 million outstanding.
However, the plane has since been damaged: someone looted it for its parts. It happened more than a year ago, but the culprits have still not been found. Montenegro Airlines’ bankruptcy administration board has filed criminal charges against unidentified persons.
The country of Montenegro is currently going through political turmoil, so the theft is believed to be a deliberate act of sabotage. Montenegro Airlines, although under administration of bankruptcy, is not on good terms with Air Montenegro, Montenegro’s new airline which the newly elected government established in 2021 after closing Montenegro Airlines in 2020.
When Montenegro Airlines declared bankruptcy, not all of its assets were transferred to Air Montenegro. Instead, the bankruptcy administrator wanted to resuscitate Montenegro Airlines first, even suggesting that it could fly again despite the country’s government having already set up a new flag carrier, Air Montenegro. Montenegro Airlines has even launched two legal actions against Air Montenegro.
Air Montenegro started flying a year ago. Photo: Air Montenegro
The plane has many problems
There are many issues with the plane that go beyond missing parts. The aircraft’s last flight was on December 26, 2020, and now most of its technical certification is outdated.
To fly it again, its new owner will need to figure out which parts are missing, then purchase and install them. They would also need to put the E195 through a full technical check and full certification of all its parts.
Missing parts, political turmoil in the country and the plane’s outstanding debt all mean that the Brazilian bank does not really want to repossess the plane. A solution being worked out involves the government of Montenegro buying back the debt from BNDS, leaving at least some of the recovered funds with the bank.