The future of Tarom
The Romanian airline, TAROM, has given up flights to London.
Roxana Vasile, 21.08.2024, 14:00
The number of passengers in Romanian airports is on the rise, compared to previous years, according to data provided by the National Airport Association. In fact, Romania is already above the level reported in 2019, the year regarded as the best for tourism in the past decade.
In the first half of 2024, nearly 12 million people transited Romanian airports, up 10.5% compared to the corresponding period of 2019 and nearly 5% more than in the first half of 2023. The rise in ticket prices, cancellations and delays, as well as the decrease in safety reported for certain foreign destinations have rechanneled an important number of holiday bookings to Romania.
Not everything is good news, however: few people choose to fly domestically. Local flights only account for 7% of the total number of passengers.
Meanwhile, the national airline, TAROM, has recently announced the sale of its slots on London’s Heathrow Airport to Qatar Airways. The transaction is scheduled to complete on October 26.
In a news release, TAROM described the sale as a strategic one, and as a necessary measure to ensure the company’s economic sustainability, given that Heathrow flights, the operator claimed, were some of the least profitable in the last few years. The sale of the London slots is expected to enable the company to focus on fleet and route optimisation, as part of a large-scale recovery plan aimed at bringing the company back to profit in 2025 and 2026.
Owned by the Romanian government, TAROM has long been struggling to survive. In the last 6 years alone, it reported losses of nearly EUR 300 million, i.e. some EUR 55 million per year. And according to the Finance Ministry, the last time the company made profits was in 2007.
In 2023, due to recovery efforts, losses were cut to EUR 17 million, and for 2024 a break-even or even small profits are expected. And at the end of April the European Commission approved a EUR 95.3 million aid package for the restructuring of TAROM.
For the time being, the management says the airline does not plan on giving up further routes in the near future. But they warn that the volatile situation in commercial aviation may trigger changes.
According to TAROM’s interim chief executive, Costin Iordache, only after completing the restructuring plan in 2026, could the company consider moving to new routes. In the meantime, TAROM is to sell 4 Airbus 318 aircraft and upgrade its fleet, by bringing in new Boeing 737 MAX 8 planes, scheduled to arrive in Romania next year.
TAROM was set up in 1954 and has been a member of SkyTeam Alliance since June 2010 and a member of IATA (International Air Transport Association) since 1993. (AMP)
