Israel's El Al is in talks to buy a thirty per cent stake in state-owned Montenegro Airlines, officials from the two airlines said on Monday. The government said three years ago it would sell a third of Montenegro Airlines, which is in need of cash to overhaul its tiny fleet, but set no deadline.

Talks with the El Al will continue throughout 2009, Haim Romano, head of El Al's board, told a news conference in the capital Podgorica.

Montenegro Airlines flies five Fokker 100 and an Embraer 195 aircraft from two airports to destinations in Europe. Zoran Djurisic, chairman of Montenegro Airlines, said the company was also negotiating the sale of stakes to Slovenian airline Adria and Russia's Air Union. The company had also held talks with the European Bank for Reconstruction and Development, he said, adding that the sale of a 30 per cent stake should be completed by the end of December.