The Montenegrin national competition authority (NCA), the Agency for Protection of Competition, has started a probe into alleged state aid to the country’s flag carrier airline – Montenegro Airlines.

In the past, Montenegro Airlines has been a recipient of restructuring state aid, for the period 2012-2015. This aid was cleared back in 2012, in accordance with Montenegro’s state aid regulations. Now, the Montenegrin NCA, which gained state aid powers only last year, is looking into whether Montenegro has assisted its flag carrier beyond the terms of the cleared aid for restructuring.

Montenegro Airlines operates in the form of a joint stock company and is controlled by the Montenegrin state.

Similarly to the relevant EU rules, Montenegro’s state aid legislation provides for a 10-year waiting period between repeated aid for restructuring.

Based on what is publicly available at the moment, the investigation of the Montenegrin NCA seems to be focusing on the funds which the airline received during this and previous year. Specifically, the airline allegedly received EUR 7.3 million during 2018 and further EUR 5.5 million of additional aid in 2019, which has not been cleared by the watchdog.

Key takeaway

If it would find that the aid to Montenegro Airlines was indeed unlawfully awarded, the Montenegrin NCA could order the repayment of the aid. If this would happen, it would be the first the Montenegrin NCA would order the recovery of unlawful state aid. Regardless of the outcome, the mere fact that the NCA has started such a high profile state aid probe could be a sign that state aid regulations in Montenegro will be taken more seriously from now on.