Montenegro's government is shutting down its national carrier, burdened with mounting debts that left it dependent on state subsidies.

"We cannot take any decision that would be legal ... to prolong the life of Montenegro Airlines," Minister of Investment Mladen Bojanic said Thursday at a press conference.

Procedures to shut down the company, which employs around 360 people, would cost around €50 million and should begin "as soon as possible," he added.

Bojanic also said that the tiny Balkan country of around 600,000 people would aim to get a new carrier off the ground in six to nine months.

Montenegro Airlines' fleet consisted of four leased planes -- three Embraer 195s and a Fokker F100.

The company registered nearly 660,000 passengers last year, the highest figure since it was established in 1994, according to official data.

Serving around 30 destinations worldwide, especially during the summer season, it boasted annual revenues of €70-€80 million but still had to take on debt to keep flying.

That left the company vulnerable when the coronavirus pandemic wiped out air traffic this year.

In January-September, Montenegro Airlines' revenues fell 80 per cent compared with 2019.

A €155 million rescue plan decided in December last year had to be dropped after Irish no-frills carrier Ryanair complained to the European Commission.

Montenegro's President Milo Djukanovic, whose party lost August legislative elections for the first time in three decades, denounced the closure as a "populist" decision.

"Closing down a company is simple and quick, even if it is the national company. But it can also be very risky and imprudent, especially in a country where a quarter of GDP is generated in the tourism sector," Djukanovic said.