RO Govt. approves EUR 380 mln restructuring strategy at flag carrier Tarom

Romania's Government approved the 2021-2022 restructuring plan of the state airline Tarom and state aid for this purpose, Profit.ro reported.

The restructuring plan's cost is EUR 380 million, half of which should come from the state aid.

The state aid covers a past rescue loan of EUR 36.7 mln, EUR 33.1 mln to cover the potential liquidity deficit and be used exclusively in the situation where Tarom fails to eliminate the liquidity deficit by postponing payments to suppliers, and EUR 121 mln - the cost of implementing the restructuring measures.

Tarom plans to renew its fleet, optimize the routes operated, close some agencies, restructure its staff, optimize the technical department functioning, optimize fuel and handling costs.

One of the plan's key elements is slashing the workforce by one third and the management positions by 50%.

This alone will result in permanent savings of EUR 8.5 mln per year.

Tarom received another restructuring state aid amounting to USD 715 mln, authorized in 2004, but as more than ten years have passed since the end of the restructuring period, according to the European Commission's rules, it can benefit from a new aid.

After approval, the new aid will be granted in the form of annual subsidies from the state budget, through the Transport Ministry's budget, after the European Commission's approval.

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