The Prime Minister of Montenegro has committed his government to supporting Montenegro Airlines (YM, Podgorica) even to the extent of paying off its debts, reports Ekonomist.

"If Montenegro Airlines does not have a future, the Government will, in accordance with the law, initiate procedures to take responsibility for it and pay off its obligations to creditors," PM Duško Marković said.

The state-owned carrier has repeatedly fallen foul of both the country's Central Bank and its airports, as well as racking up debts to Flight Control of Serbia and Montenegro (SMATSA). Latest estimates put its debt at EUR24 million (USD28 million) to Aerodromi Crne Gore (Airports of Montenegro) and EUR16 million (USD18.8 million) to the state. Plans by the state to sell off the ailing carrier have so far been unsuccessful.

Marković has now called on the profitable Aerodromi to guarantee a EUR2.3 million (USD2.7 million) loan to the airline to help with its liquidity.

However, the Vice President of Montenegro's opposition party, SDP MP Rasko Konjevic, has criticised the move, saying that the new loan will never be repaid. He said the money would better be channelled into education, health or policing, particularly as the airline's debt already stands so high. Further, Konjevic claims the loan amounts to illegal state aid.

"It is clear that in this case the Government violated the basic rule that one state aid cannot be repeated in the next ten years, and Montenegro Airlines was a beneficiary of the state aid scheme six years ago," Konjevic said. "The government has violated ratified international treaties that have supremacy over domestic legislation, which insists on non-discriminatory attitude towards air carriers."

He also said that allowing Montenegro Airlines to continue to mount tax debts with the state was unfair, as small and medium-sized businesses were not similarly exempted.

Konjevic and Zoran Đurišić, the former head of Montenegro Airlines, will face each other in a television debate this week about the past and future of the airline.