The national operator will receive an infusion of almost 100 million euros from the state budget, in order to escape bankruptcy. With this “certificate of health”, the company could become more attractive to investors. The government is already looking for “suitors”. He wants to convince Emirates, one of the best performing airlines in the world, to buy part of TAROM.
Should TAROM be sold?
It is a matter of security and prestige for the state to have its own air transport company. But if it is ineffective, what is the value of the călătorimromâneşte hashtag, used by Prime Minister Ciolacu? If it has mediocre management, why keep pumping money into this black hole?
Since 2007, TAROM has not made a profit. It only flies in loss. It accumulates debts and is kept afloat with money from Romanians’ taxes. The fleet is old, inadequate for today’s business conditions and continuously decreasing. From 60 planes, as many as he had in ’89, he reached 18, of which four are fired on the right. The number of domestic and foreign destinations has dropped to 21 and it has no long-haul flights. In addition, the national company is a big family, literally. The institution is full of employees who are related to each other.
Under these conditions, the option of partial privatization is a solution to consider. In the first phase, TAROM should prove to investors that it is a viable company. They could do it with the restructuring plan: get rid of debt, buy aircraft and add new destinations.
TAROM. Fly better?!
Despite the disaster numbers, TAROM still has some important assets for investors. It owns valuable slots (London Heathrow, Paris Charles de Gaulle) and has a monopoly on repairs at Otopeni Airport. Through the Technical Department, TAROM deals not only with the maintenance of the aircraft in its own fleet, but also with those of other airlines.
Emirates, a company wholly owned by the Government of Dubai, would be interested in a transaction, but does not want the majority stake, because it would be too complicated with European legislation. It would also be willing to invest in the construction of a new terminal in Otopeni, a project that has been going on for years. With capital from the Gulf, TAROM could follow the Serbian flight lesson. 10 years ago, Etihad Airways, one of the Emirates companies, bought 49% of Air Serbia and managed to turn it into a profit.
Minister Grindeanu aims even higher: he dreams of making the national operator a kind of Swiss. It’s just that the head of Transport doesn’t seem to know that the Swiss state no longer owns anything from Swiss. The company is 100% owned by the Germans from Lufthansa. However, our authorities have repeatedly said that they want to keep the majority stake. Or maybe there are other plans for TAROM…
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