Wizz Air challenges Romanian state aid to Tarom, Blue Air

Wizz Air (W6, Budapest) has filed a complaint at the General Court of the European Union against the European Commission approvals for Romanian state aid granted to state-owned flag carrier Tarom (RO, Bucharest Otopeni) and privately-held Blue Air (Romania) (0B, Bucharest Otopeni). Tarom received EUR19.3 million euros (USD23 million) in October 2020 to compensate for losses caused by Covid-19 travel restrictions, after a nod from Brussels, in addition to a EUR36.7 million (USD44.8 million) rescue loan approved in February 2020, shortly before the mass outbreak. Blue Air also received Covid-related aid of EUR62 million (USD75.7 million). Hungary-based budget carrier Wizz submitted its objection against Tarom’s EC-approved state aid in January 2021, and against Blue Air’s last month, the Romanian news site Economica.net reported on May 20. Economica was issuing its report, it said, the day after Ryanair (FR, Dublin Int’l) notched up its first legal victories against state aid provided to European flag carriers, to KLM Royal Dutch Airlines and TAP Air Portugal. Oana Petrescu, chief executive of Blue Air, told the news portal that “we have no cause for concern.” She had been aware of the challenge Wizz Air had lodged but emphasised that her carrier had complied with all the necessary current requirements related to state aid in the European Union. “Last month, I also submitted an audit report and restructuring plan requested by the commission, documents that confirm the premises on the basis of which we received the state-guaranteed loan in October 2020,” she said. And Wizz Air has itself benefitted, she added, in April 2020, from a GBP300 million pound bailout via the Bank of England’s Covid Corporate Financing Facility (CCFF) – a controversial decision in the aviation sector at the time as struggling Virgin Atlantic (VS, London Heathrow) received nothing. Wizz Air CEO József Váradi has been telling the international media over the last year that many European airlines which had been mismanaged before the Covid-19 crisis and were already short of cash were now asking for state assistance, agreeing with Ryanair that such bailouts would only serve to prolong the existence of inefficient airlines. Wizz Air is the market leader in Romania, operating routes from nine airports in the country, according to the ch-aviation capacities module, from Bucharest Otopeni, Cluj-Napoca, Iasi, Timisoara, Sibiu, Craiova, Bacau, Suceava, and Tirgu Mures. On May 21, the low-cost carrier told local media that it would resume 27 more routes from these airports to destinations in nine countries by June 6 (in France, Germany, Italy, Malta, the Netherlands, Portugal, Spain, Switzerland, and the UK). Tarom and Wizz Air had not responded to ch-aviation’s request for comment at the time of going to press.