Limits imposed on Tarom as EU approves financial aid for restructuring

Romanian flag-carrier Tarom has secured European Commission clearance for a financial restructuring package, which it will use for initiatives including fleet renewal. The Romanian transport minister, Sorin Grindeanu, says the package amounts to E95.26m of which E49.53m represents rescue aid – plus interest – granted in 2020. Along with fleet modernisation, he says, the funding will support “optimisation” of commercial policy and the carrier’s network. It will also contribute to efficiency improvements in aircraft maintenance activities as well as digitisation efforts, including ticket distribution, across the company. Grindeanu adds that the financing will cover a “liquidity deficit” for this year. The Commission says the measures will allow Tarom to “restore its long-term viability” while “minimising” distortion of competition. “To limit any possible competition distortions triggered by the public support, Tarom will significantly downsize its number of routes and aircraft,” says competition commissioner Margrethe Vestager. Romania’s government had notified the Commission of a restructuring plan in May 2021, during the disruption of the Covid-19 pandemic.<br/>