Former Etihad CEO Set To Help Launch New Airline For Montenegro

James Hogan, the President and CEO of Etihad until 2017, has reportedly been invited to Montenegro to help set up a new national airline in the country. He has been spotted in the capital, Podgorica. The government of Montenegro is under pressure to replace Montenegro Airlines, the flag carrier of the country which it had shut down in December 2020.

James Hogan Air Serbia
In August 2013, James Hogan launched Air Serbia to succeed failing Jat Airways – is he about to repeat the process in neighboring Montenegro too? Photo: Getty Images

James Hogan spotted in Montenegro

According to reports by Standard, James Hogan has been spotted in Podgorica, the capital of Montenegro. It is reported that Hogan is there by invitation from the Finance Minister of the country, Milojko Spajić.

Hogan is visiting Montenegro in a consulting capacity as the founder and chairman of his aviation consultancy, Knighthood Capital. The reports indicate that Montenegro is paying 1,200 EUR ($1,500) for each hour of these consulting services.

As the head of Etihad, Hogan had stood behind the creation of the Etihad Aviation Group, the parent company of Etihad. The Group embarked on a huge purchase spree of airlines in financial difficulties. Under his leadership, Etihad became a minority owner of Alitalia, Air Berlin, Virgin Australia, Jet Airways, Darwin Airline, Air Serbia, and Air Seychelles.

The intention, at the time, was to create an extensive network, mostly in Europe, that would feed Etihad’s own network out of Abu Dhabi. However, this did not work, and the majority of these investments have ended in bankruptcies (including Air Berlin, Alitalia, and Jet Airways).

In other cases, the partnerships ended within years of being formed. Most recently, Etihad’s stake in Air Serbia was greatly reduced when Etihad did not participate in a financial injection into Air Serbia. Its other owner, the Serbian government, did.

Etihad Airways plane Getty Images
Etihad Airways has not benefited from Etihad Aviation Group nearly as much as it had wished to. Photo: Getty Images

Nevertheless, the government of Montenegro has still invited James Hogan for help, despite Etihad’s limited success in realising its plans in the past. This track record includes Etihad’s dwindling partnership with Air Serbia, which is now the largest airline in Montenegro and a well-known case in point.

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Montenegro Airlines urgently needs replacing

As Simple Flying reported on the day it happened, the government of Montenegro announced on 24th December that it would shut down Montenegro Airlines. Within a matter of days, Podgorica and Tivat, the two airports in Montenegro, were left with a huge drop in seat capacity, as Montenegro Airlines was by far the largest airline in the country.

Several airlines responded immediately: Air Serbia increased its frequencies on flights from Belgrade to Montenegro and Tivat, and it started sending Airbus A319 and A320 aircraft instead of ATRs. Austrian Airlines extended its Vienna-Podgorica route beyond the Christmas holiday season and converted it to being year-round. Chair Airlines of Switzerland announced the launch of a new route from Zurich to Podgorica.

Montenegro Airlines Fokker 100 Frankfurt Airport
Montenegro Airlines is no more, and that has turned out to be a problem for Montenegro. Photo: Tom Boon, Simple Flying

Despite foreign airlines reacting quickly, much of the capacity previously served by Montenegro Airlines is yet to be replaced. It is likely that it will never be replaced in full without a substantial intervention from Montenegro’s airports and the country’s government.

This is why the Montenegrin government is urgently trying to establish a new national airline to replace Montenegro Airlines. It’s the only way to avoid having to pay foreign airlines to operate routes that the country used to rely on to support its tourism industry. It will be interesting to see what comes out of these talks.

What do you think will be the outcome of Hogan’s visit to Montenegro? Let us know what you think of this story in the comments below.