Brussels approves €19.3mn Romanian state aid to Tarom

The European Commission has approved Romanian state-guaranteed loans of up to EUR19.3 million euros (USD22.6 million) to Tarom (RO, Bucharest Otopeni), aimed at compensating it for losses caused directly by the coronavirus outbreak and the resulting travel restrictions, the commission said in a statement on October 5. The measure is designed to compensate for losses sustained during the period from March 16 to June 30, a lockdown that “forced Tarom to cancel most of its scheduled flights and caused major losses in turnover,” the statement recounted. The commission concluded that the Romanian measure is in line with European Union state aid rules that were modified earlier this year to allow member states to compensate specific companies or sectors for damages caused by exceptional occurrences, such as the outbreak. It found in particular that Romania’s measure will compensate damages directly linked to the pandemic, and an independent external audit firm will verify that the aid does not exceed the amount of damage suffered during the period. After the audit, any public support the state-owned flag carrier receives that is in excess of the actual damage suffered will have to be returned to the Romanian state, thereby excluding the risk of overcompensation, the European Commission assured. In August, as previously reported, the commission cleared privately-owned Blue Air (Romania) (0B, Bucharest Otopeni) to receive EUR62 million (USD73 million) in state aid from the Romanian government. Also granted in the form of state guarantees, the sum was split between EUR28 million (USD33 million) compensating it for pandemic-related losses and EUR34 million (USD40 million) to provide additional liquidity to help it operate in a higher-cost, lower-demand environment. Tarom has so far resumed 28 routes as of the week starting October 12, nine of which are domestic, according to the ch-aviation capacities module. All four of its A318-100s, all four of its B737-800s, and all four of its ATR72-600 turboprops are currently active, as are two of its four B737-300s and two of its four B737-700s, but all seven of its ATR42-500s and both of its two ATR72-500s remain inactive, the ch-aviation fleets advanced module shows.