EU approves 95 mln euro state aid for Romania's Tarom

The scheme, approved under the Commission's guidelines for rescuing and restructuring non-financial undertakings in difficulties (R&R Guidelines), aims to enable Tarom to return to viability through the implementation of its restructuring plan, contributing to the common interest objective of providing regional connectivity to Romanian citizens, the Commission said in a press release.

Romania first notified the Commission about a plan to restructure Tarom in 2021. The approved scheme comprises a debt write-off of around 246.2 million lei and a capital injection of about 227.5 million lei, as per the statement. Tarom will also make an own contribution of 381.1 million lei towards its restructuring plan, in the form of proceeds from aircraft sale and a finance lease.

Tarom's restructuring plan consists of four major objectives - fleet renewal, flight route optimisation, improving organisation efficiency, and cost optimisation, the flag carrier said in a separate press release.

The Commission's R&R Guidelines allow member states to assist struggling companies, under certain strict conditions.

"Following our in-depth investigation, we concluded that Tarom’s restructuring plan will ensure that the airline becomes viable in the long term. To limit any possible competition distortions triggered by the public support, Tarom will significantly downsize its number of routes and aircraft," noted Margrethe Vestager, executive vice-president in charge of competition policy at the Commission.

(1 euro=4.9758 lei)