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Romania to seek EU rescue aid for flag carrier Tarom - transport min

Romania to seek EU rescue aid for flag carrier Tarom - transport min Tarom

BUCHAREST (Romania), December 13 (SeeNews) - Romania's transport ministry will seek rescue aid from the European Commission and the national budget to save flag carrier Tarom which is expected to close 2019 with a 190 million lei loss ($44 million/40 million euro), transport minister Lucian Bode said.

The ministry will apply for aid of 47 million euro ($52.3 million) from Brussels plus a restructuring aid of about 110 million euro from the state budget  in order to rescue the company, Bode said during a talkshow aired by B1TV on Thursday evening.

"Things look very bad at Tarom, we will close this year with 190 million lei losses and we have only around 20 million euro available in our accounts at this moment. We have instalments to pay to Boeing, we are considering the acquisition of ATR aircraft, according to the memorandum we signed, so it is clear that we need to modernize the fleet," Bode explained.

According to him, Tarom needs a very well defined restructuring programme.

"We will ask for rescue aid and we have also discussed this in Brussels, because this company has not asked for rescue aid in the last 10 years," Bode said.

The air carrier's net loss narrowed to 130 million lei in 2018 from 170 million lei in the previous year, while turnover rose by 21% to 1.4 billion lei, data from Romania's transport ministry showed.

In October, Tarom named George Costin Barbu as interim CEO after Valentin Nicolae Gvinda refused to take up the position amidst a political scandal involving a possible instigation to abuse of office. Barbu's term will expire in January.

According to local media reports, Gvinda refused to accept the job of interim CEO because of the complicated financial and managerial situation at Tarom.

(1 euro=4.7791 lei)