TAROM Reorganization

Romania's flag-carrier airline TAROM, which is undergoing a process of re-evaluation and reorganization, may see a profit at the end of the year for the first time since 2007

Corina Cristea, 29.03.2018, 13:41

Established in
1954 and subordinated to the Ministry of Transports, the Romanian National Air
Transport Company TAROM aims to become the biggest airline on the local market.
This is an ambitious plan given that 2017 was not very good for TAROM. In fact,
the company had seen considerable losses for the previous ten years. Last year
alone, for example, losses stood at 42 million euros. Oversized staff, planes
with technical problems, the elimination of a number of flights and the
retirement of two of its aircraft are some of the causes of TAROM’s decline.

Competition from low-budget airlines, ineffective ticketing and growing customer dissatisfaction also
led to a loss in the market share. The company has some 2,000 employees, of
whom 70% are related to which each other through family ties or are connected
in some way, and, according to a report by the oversight body of the former
prime minister Mihai Tudose’s cabinet, was sabotaged from within, with its
employees exchanging emails with other employees detailing the company’s
strategy with regard to taking over certain flights. Moreover, according to the
state institutions, TAROM’s maintenance and repairing costs were 40% higher
than those of any other company in Europe.

The company had no less than 5
managers in 2017 alone. The fifth and current manager, Wolff Werner-Wilhelm,
says his team has managed to cut expenses by 2.7 million euros last year by
streamlining the company’s activity. Now undergoing a process of re-evaluation
and reorganization, TAROM has big plans, and, according to its draft income and
expenditure budget for 2018, may see a profit at the end of the year. Funds
have also been allocated for investments. Under the new governing programme for
2018-2020 published at the end of January, the urgent renewal of the TAROM
fleet through the lease of 27 modern planes and the launch of new regional
flights and even courier flights to the US and Asia are among the measures
meant to put the company back on the right track. New domestic flights are
already being launched and the first two new planes are to arrive over the next
few weeks.