EC orders Romania to recover 33.8 mln euro in state aid from Blue Air

"The European Commission has concluded that Blue Air's restructuring plan was not capable of restoring the airline's long-term viability and it is therefore incompatible with EU State aid rules," it said in a press release.

Blue Air, which has been struggling with financial issues since 2019, received in 2020 a 28 million euro public guarantee to mitigate Covid-19-induced losses and a 33.84 million euro public guarantee for a rescue loan to address liquidity shortages, as both measures were approved by the Commission.

Romania agreed that if the public guarantee on the rescue loan was not terminated after six months from the first aid payment which took place in October 2020, it would submit either a liquidation plan or a comprehensive restructuring plan for Blue Air to the Commission, the Commission recalled.

In April 2021, Romania submitted a restructuring plan which was subsequently updated several times. In November 2022, Romania reimbursed the loan and took a 75% shareholding in Blue Air after the airline suspended operations in September 2022.

Following an in-depth investigation launched in April 2023, the EC determined that Blue Air's restructuring plan was unrealistic.

Blue Air's subsequent request for insolvency proceedings further showed that the restructuring efforts weren't enough, it added.

Under EU state aid regulations, measures supporting an unsustainable restructuring plan must be retracted. Thus, Romania is mandated to recover the illegal aid, plus accrued interest, from Blue Air, the Commission concluded.

($=0.9279 euro)