The European Commission is investigating the proposed 190 million EURO state aid to save TAROM
The European Commission has launched an in-depth investigation into whether the support measures for TAROM would be in line with EU state aid rules for companies in difficulty.
TAROM, Romania's state-owned company, has been facing financial difficulties for years, not just because of COVID-19. However, during the pandemic, TAROM received a temporary rescue loan of around EUR 36,7 million, after approval by the European Commission under EU state aid rules. On May 28, 2021, Romania notified the European Commission of a plan for the restructuring of TAROM.
The restructuring plan sets out a package of measures to streamline TAROM's operations, renew the fleet and reduce costs. Romania intends to support the restructuring with approximately 190 million euros of public funding. This support would take the form of a capital injection, a direct grant and a debt relief of the amount of rescue aid (approximately EUR 36,7 million) and the related interest.
More information on the European Commission's investigation
Regarding the evolution of TAROM and the situation of the national airline, I wrote many articles in the nine years of AirlinesTravel.ro. I have always supported the idea that Romania needs a profitable national airline, but this can only happen by stripping the company and depoliticizing it. Or, this does not happen, and the TAROM company is less than 10-12 years old. We cannot dream of transatlantic routes as long as TAROM loses even the most basic routes.
If TAROM doesn't do something concrete in the 12th hour to be a profitable company, let's not be surprised when it goes bankrupt. The market is free, the competition is high, and the rigidity of TAROM prevents the evolution of the company in the rhythm established by the industry.