Montenegro’s plan to cancel the concession process for Podgorica and Tivat airports has left the country without a confirmed replacement investment model, while passenger growth continues to exceed existing infrastructure capacity. After almost seven years of delays, the airports are facing pressure to expand terminals, aprons and operational systems as tourism demand increases.
Rising passenger traffic exposes infrastructure limits
The two airports surpassed 3 million passengers in 2025 for the first time, despite limited strategic expansion during the concession process. The 2026 business plan of Aerodromi Crne Gore projects total traffic of approximately 3.63 million passengers, including 2.29 million at Podgorica Airport and 1.34 million at Tivat Airport.
Podgorica’s projected passenger growth of around 31% is largely linked to the establishment of a Wizz Air base in March 2026. The airline has stationed aircraft in Podgorica, introduced 17 new routes and announced approximately 1 million additional annual seats. The expansion improves year-round connectivity with European markets but also increases pressure on a terminal that had already exceeded its intended capacity. Without parallel investment in ground infrastructure, higher airline activity risks creating further congestion.
At Tivat Airport, capacity limitations are particularly significant because the facility serves Montenegro’s main tourism corridor, including Budva, Luštica Bay, Porto Montenegro, Portonovi and the Bay of Kotor. Limited operating hours, including unresolved issues related to regular night operations, restrict additional traffic opportunities.
Airport operator has financial capacity but needs external financing
Aerodromi Crne Gore expects to generate €65.93 million in revenue in 2026, with core expenses of approximately €32.2 million. The company’s plan includes €18.06 million for airline incentive schemes and forecasts a pre-tax profit of €15.67 million and net profit of approximately €13.37 million. The company estimates that more than €150 million in capital investment is required to bring Podgorica and Tivat airports to an adequate operational level.
Using retained earnings alone, reaching that investment level would take more than 11 years based on projected profitability, before considering maintenance, information technology, security improvements and working capital needs. A potential financing structure could combine €30 million–€40 million of retained cash and operating surpluses, €80 million–€100 million of bank or institutional financing, and €20 million–€40 million from EU-related grants or public co-financing. A possible €90 million debt facility with a 15-year maturity and interest rate of approximately 5–6% would require annual debt servicing of around €9 million–€10 million. Such borrowing would depend on the company’s operating cash flow and the sustainability of airline incentive spending.
Reconstruction divided into urgent works and long-term expansion
The investment programme could be structured in two phases.
The first phase, estimated at €20 million–€30 million, would focus on immediate capacity improvements, including:
- repairs to roofs and airport buildings;
- additional security and passport-control capacity;
- baggage-handling improvements;
- passenger-flow optimisation;
- temporary gates;
- utilities and sanitation systems;
- staff facilities;
- selected apron works.
These measures could be implemented before or shortly after the 2027 summer season if procurement begins immediately.
The second phase would require approximately €120 million–€160 million over three to four years.
At Podgorica Airport, the required investments include:
- terminal expansion;
- additional check-in and security facilities;
- larger baggage systems;
- more boarding gates;
- apron and taxiway improvements;
- upgraded ground equipment;
- digital passenger-processing systems;
- improved road and public transport access.
Tivat Airport represents a more complex engineering challenge due to surrounding terrain, coastal development and limited operating windows. Expansion would require improvements to:
- passenger facilities;
- aircraft stands;
- baggage systems;
- drainage;
- electricity supply;
- safety systems;
- environmental infrastructure.
Night operations would require additional lighting, navigation systems and operational procedures, although terrain and approach conditions create further limitations. Planning estimates place Podgorica’s medium-term investment needs at €50 million–€70 million, while Tivat would require approximately €80 million–€110 million. Final capital expenditure would depend on detailed design, geotechnical studies, environmental assessments and airside safety analysis.
Concession process narrowed to two international bidders
The concession tender launched in 2019 was designed to transfer financing and investment obligations to an international airport operator while maintaining state ownership of airport land and existing assets.
The process eventually reached two bidders:
- Incheon International Airport Corporation of South Korea;
- Corporación América Airports, a Luxembourg-registered member of a global airport group.
The Incheon consortium offered an upfront concession payment of €100 million, reported initial investments of approximately €132 million, and proposed a variable fee equal to 35% of annual airport revenue. Corporación América offered an upfront payment of €101 million, approximately €158 million in initial investment, and a variable fee of slightly above 17%.
The airports were valued at approximately €264.36 million, requiring parliamentary approval because the assets exceeded the statutory threshold for government-only decision-making. The proposal remained blocked in Parliament while questions emerged regarding bid validity and bank guarantees.
Incheon later withdrew after requesting that the €100 million upfront payment be postponed for one year. The Ministry of Transport rejected changes to a key financial condition after completion of the tender, stating that such changes would affect the procurement framework. Corporación América remained prepared to continue, but the government considered its financial offer insufficient and moved towards cancelling the process. The final decision remains with Parliament.
Alternative financing options after concession failure
The concession process was affected by the pandemic, political changes, bid evaluation disputes and parliamentary delays, while passenger numbers and airport financial performance changed significantly compared with 2019. A concession could have provided upfront capital, international operational expertise and transfer of some construction and traffic risks. However, Montenegro would have transferred a significant share of airport revenue for 30 years while maintaining responsibility for ownership, tariffs, access and employment issues. Under the state-investment model, Aerodromi Crne Gore would retain future cash flow and strategic control, but only if it is allowed to invest directly in infrastructure.
During the concession process, projects worth more than €150 million were postponed because changing airport conditions could have affected the value of the assets being offered. Starting a new concession procedure could require new studies, valuations, documentation, consultations, prequalification and evaluation. Even an efficient process could take 18–30 months before financial close, followed by design and construction. Direct investment is therefore the model capable of delivering visible improvements before the 2027 season. Initial works could focus on infrastructure that would remain valuable under any future ownership structure, including safety systems, baggage capacity, terminal repairs, apron functionality, digital processing and passenger movement improvements.
EU funding and institutional financing options
A larger financing package could involve institutions such as the European Investment Bank, European Bank for Reconstruction and Development, Council of Europe Development Bank or commercial lenders. A structured financing facility could be linked to independently verified traffic forecasts and investment milestones. A state guarantee could reduce financing costs, although Aerodromi Crne Gore’s own cash generation could support borrowing.
Tourism specialist Ivo Županović pointed to the reconstruction of Dubrovnik Airport as an example of European financing support. The wider Dubrovnik airport programme involved approximately €215 million in investment, with the European Regional Development Fund contributing around €134.6 million. Montenegro cannot assume the same level of grant support before EU membership, but the example highlights the importance of preparing technical documentation and procurement packages early.
Montenegro aims to join the European Union in 2028, although accession depends on reforms and approval by existing member states. Airport reconstruction therefore needs a financing model that works without future grants while allowing eligible projects to receive European support later.
Airport capacity linked to tourism competitiveness
Montenegro recorded 2.73 million tourist arrivals and 15.37 million overnight stays in 2025. Foreign visitors generated 95.8% of overnight stays, while coastal destinations accounted for 92.6% of total nights. Air connectivity supports hotel revenues, VAT income, employment, tourist taxes, restaurants, marinas, transport services and other sectors beyond airport operations.
Tivat Airport is particularly important for the premium tourism segment, serving destinations including Porto Montenegro, Luštica Bay, One&Only Portonovi, Aman Sveti Stefan, Kotor and the Bay of Kotor. Luxury visitors paying between €1,000 and €5,000 per night are affected by airport conditions such as terminal congestion, building problems and baggage delays.
Limited airport capacity also affects airlines. Restricted stands, operating windows and passenger-processing delays can encourage carriers to move capacity to airports such as Dubrovnik, Tirana or Split, where operations may be more reliable. The current €18.06 million airline incentive programme can attract carriers, but infrastructure determines whether routes remain sustainable.
Governance and investment priorities
Employees and trade unions support continued state ownership of the airports and argue that the profitable operator can finance reconstruction. The state-owned model requires stronger governance, professional procurement procedures and protection of investment funds from short-term spending decisions. Aerodromi Crne Gore requires a dedicated capital plan, independent engineering supervision, transparent tender procedures and annual reporting on project costs, delivery milestones and capacity improvements.
A future investment programme requires Parliament to resolve the status of the failed concession process and the government to approve a funded reconstruction plan covering immediate works for 2027, permanent expansion during 2027–2030, and financing capable of mobilising at least €150 million. The airports’ projected €65.93 million revenue, €15.67 million pre-tax profit and passenger forecast of 3.63 million make them infrastructure assets capable of supporting long-term financing. The remaining issue is establishing a clear framework for procurement, financing and construction management.
