November 6 (SeeNews) - Romania's government said it approved a 923.6 million lei ($225.3 million/ 189.8 million euro) restructuring aid for state-owned flag carrier Tarom.
The state aid is part of a 1.8 billion lei restructuring plan submitted by Tarom in August which the government approved on Thursday evening.
Tarom first announced that it will seek restructuring aid in February.
Under the restructuring plan, Tarom pledged to lay off 33% of its staff, close down some of its agencies, optimise its routes and introduce a more efficient fuel consumption management system.
Tarom received a 176 million lei state-guaranteed loan in February in order to solve its liquidity needs during the March-August period, but the crisis caused by the COVID-19 pandemic further complicated its financial situation, the document showed.
Tarom booked a 39 million euro ($46.3 million) loss in the first half of 2020, while its revenues reached 48 million euro, At the end of 2019, the company posted a 36 million euro loss on 305 million euro revenues, according to the memorandum.
At the beginning of October, the European Commission said that it has approved a loan guarantee of up to 19.3 million euro to help Tarom overcome financial difficulties caused by the COVID-19 pandemic. The measure aims at compensating the airline for losses directly caused by the coronavirus outbreak and the travel restrictions introduced by Romania and other destination countries to limit the spread of the coronavirus during March 16-June 30, the Commission said at the time.
(1 euro=4.8668 lei)