TAROM was supposed to receive four new leased aircraft in 2024. The companies from which they were to be leased told the company that they no longer had anywhere to deliver the planes. In addition, Boeing also changed the delivery date for the contracted planes in 2018.
In the summer of 2018, the Ministry of Transport signed a contract with Boeing for an order of five Boeing 737-MAX 8 planes. Lucian Șova, the head of Transport at the time, announced that the planes were to be delivered in 2023.
280 million dollars eis the amount that TAROM needs
But the reality is completely different. Since then, things and the economic context have changed. After the pandemic, not all airlines flew anymore, and many went bankrupt. Those who remained in the market needed serious capital injections to survive.
Our companies were no exception. It's been a year since the state took over the insolvent Blue Air, and TAROM is going through a restructuring program while waiting for the green light from the European Commission for new state aid.
280 million dollars eis the amount needed by TAROM to buy new planes, as part of the acquisition program started in 2018, which also involves advance payments, according to a report of the company's administrators, seen by Economica.net.
For this year, the company has to pay 9,12 million dollars, and by the end of 2024, by others 100 million dollars, which also includes outstanding payments from 2019 and revised according to the new aircraft delivery term, term that was modified by Boeing to 2026, the report seen by Economica.net.
TAROM put the older aircraft in the fleet up for sale.
It has managed to sell ATR 42-500 aircraft and plans to sell Airbus A318 and Boeing 737-700 aircraft as well.
In their place, four Boeing 737 MAX 8 planes would enter the TAROM fleet in the first half of 2025, one through financial leasing, and three others through operational leasing. But this new planes that would enter the company's fleet come with one year late.
However, TAROM was notified in the fall of this year of the termination of the effects of the letters of intent for the four B 737-8 MAX, coming from the lessor Minsheng Commercial Aviation (Ireland) Company Limited, according to data published in the Official Gazette. In this context, TAROM has started looking for Boeing 737 MAX and 737-800 aircraft available for 2024.
For the 16th year, TAROM is flying at a loss
An investment budget of 115 million lei was approved for this year, of which 82,5 million lei are allocated to aircraft checks and engine repairs, which are due and mandatory this year.
This year, TAROM is still running at a loss. It is the 16th year the airline has failed to turn a profit. The last three years, marked by the COVID-19 pandemic that has severely affected the aviation industry, have brought the company to the state aid needed to survive.
The estimated gross loss for this year in the revenue and expenditure budget, approved by the company's shareholders at the beginning of this month, is 62,4 million lei, according to the draft normative act consulted by Economica.net.
The loss is 71% lower than the approved result for 2022, i.e. a loss of 216 million lei. In the base case, TAROM becomes profitable in 2024, and cash flows should turn positive this year.