Largest Romanian airline asks Govt. for EUR 45 mln rescue loan
Blue Air, the largest Romanian air carrier and the second-biggest player on the local market, after Hungarian rival Wizz Air, has asked the Government for a rescue loan at a preferential interest rate.
The company, whose operations were profitable last year, has been severely hit by the flight restrictions imposed by European countries to limit the spreading of the new coronavirus pandemic. Some 90% of Blue Air’s pilots are currently in technical unemployment and the company has been trying to rotate them on the few flights it still operates so that they don’t lose their licenses, Blue Air CEO Oana Petrescu told Mediafax.
The size of the loan Blue Air has requested from the Government is EUR 42-45 million, according to sources familiar with the request quoted by Hotnews.ro.
If the company fails to get the rescue loan, the routes operated by Blue Air will be taken over by other airlines that do not pay taxes to the national budget (since they are foreign), Blue Air officials have argued. Furthermore, the company added that it would lose the EUR 80 million invested during 2016-2018.
Romania’s Government has approved a EUR 37 million loan for the state owned airline Tarom airline earlier this year.
Blue Air was set up in 2004 and has evolved over the years into a pan-European air operator, with operational bases in Romania, Cyprus, Italy and the United Kingdom.
Blue Air announced it broke even in the 12 months ending September 30, 2019, when it achieved a EUR 3.4 mln net profit (before the costs of restructuring the fleet and operations), compared to EUR 24.4 mln losses in the previous 12-month period. The operating profit for the financial year 2019 reached EUR 8.9 mln, compared to EUR 19 mln operating losses in the previous 12-month period.
(Photo source: Facebook/Blue Air)