New fine for Blue Air

The Romanian low-cost airline Blue Air received a new fine from the Consumer Protection Authority for the flights it cancelled in recent months

Mihai Pelin, 05.10.2022, 13:50

The low-cost airline Blue Air got a
new 2-million-EUR fine from the Consumer Protection Authority for the flights
it cancelled after June 15 and September 6, respectively. Over 150,000
passengers from 23 EU member states were affected, the total value of the
prejudice exceeding 19.5 million EUR, accounting just for the value of the
tickets purchased, authorities say. At the same time, Blue Air awarded refunds
only to 1% of passengers. In light of its findings, the Consumer Protection
Authority decided to hand out two new fines, one worth 2 million EUR, and a
second one worth 40,000 EUR for repeated violations. In July, Blue Air got another 2-million-EUR
fine from the Consumer Protection Authority for cancelling over 11 thousand
flights over 2021-2022, the total value of tickets standing at some 13.5
million EUR.

Blue Air flights are currently suspended starting September 6,
airline officials arguing at the time that the Environment Ministry froze the
company’s bank accounts due to the accrued debt. Although the freeze was lifted
the next day, and the authorities ruled that Blue Air was to pay its debt for
environment permits in spaced-out installments over the course of a year, Blue
Air announced it is unable to resume flights on October 10, as originally
announced, due to the company experiencing financial difficulties. Blue Air is
currently talking to potential investors, lenders and the authorities with a
view to restructuring its capital profile and eventually resuming flights. The
Government has allotted 1 million EUR from its reserve fund to bring Romanians
left stranded in international airports back home with the help of the national
airline Tarom. Blue Air however must cover these costs as well, the authorities
pointed out. Blue Air’s total debt was estimated at over 230 million EUR. The
company was set up in 2004 and branched out in the following years. In recent
years, however, the main shareholder was arrested by anti-corruption
prosecutors and sentenced to prison, which is when the company’s financial
troubles started. In 2020, against the COVID-19 pandemic, Blue Air secured a
60-million-EUR state-guaranteed loan.

Blue Air has an arrangement with creditors
until June 2023, signed over two years ago with a view to avoiding insolvency,
recovering and paying its outstanding debt. Many Romanians who have filed for
refunds as a result of their flights getting cancelled by Blue Air got nothing
in return. Very few decided to take the airline to court, where they eventually
obtained what they were due plus an interest for the period of time their money
was withheld by Blue Air. (VP)