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How can TAROM be saved?

Romania’s national airline, TAROM, is set to receive aid from the European Commission, but the reorganisation process may entail redundancies.

Photo: fb.com / TAROM
Photo: fb.com / TAROM

, 25.04.2024, 14:00

 

Romania’s national airline, TAROM, is to receive aid from the European Commission until the end of April, and then it will undergo an economic reorganisation process, the Romanian transportation minister Sorin Grindeanu announced.

 

The air operator owned by the Romanian state has been struggling with economic instability for several years, and successive rescue plans have failed to lead to the results expected by the government.

 

According to data for the first half of 2023, TAROM had losses of over EUR 10 million, significantly lower than those reported for the corresponding period of 2022, when the company was reporting losses of over EUR 41.8 mln.

 

In this context, the transportation minister says the new rescue plan is aimed at “placing TAROM on sound economic foundations.”

 

Sorin Grindeanu: “Once we have received this aid from the European Commission, TAROM must switch to a reorganisation stage, and we are open to any kind of proposals that would help place TAROM on sound economic foundations. Our willingness to save this company is beyond question, and so is our willingness to find any kind of solutions, including partnerships, that would lead to this positive outcome.”

 

Grindeanu also suggested that the TAROM reorganisation plan may entail making around 50% of the staff redundant, given that the state-owned airline currently has an unsustainable number of employees.

 

Sorin Grindeanu: “A company the size of TAROM, which rests on correct economic principles, normally has some 500-600 employees, 90% of them being flight and cabin personnel. We have almost double that figure.”

 

The transportation minister also emphasised that the Romanian government cannot provide direct aid to TAROM because this would come against competition rules and the EU directives on state aid. So, he believes, alternative solutions must be identified in order to break what he called “a vicious circle,” and one of these solutions may be to find investors for newer aircraft and for TAROM to improve its services.

 

Grindeanu explained that solutions had also been explored during the 4-day visit made by a governmental delegation headed by the PM Marcel Ciolacu in the Middle East.

 

Set up in 1954, TAROM has been operating under the authority of Romania’s transportation ministry. The airline has been a member of the International Air Transport Association since 1993, and of SkyTeam Alliance since 2010. TAROM operates 18 aircraft and flies to 70 destinations, using both its own air fleet and partner services. (AMP)

photo: pixabay.com
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