Romania’s Government is ready to extend EUR 157 million to state airline Tarom, which has been struggling with financial and operational problems for many years, transport minister Lucian Bode said at B1 TV station, News.ro reported. 

The Government has asked the European Commission’s permission to go ahead with this plan, he added.

Out of the total sum, EUR 47 mln will be transferred immediately as a “salvage loan” while the remaining would finance a recovery plan, Bode said, stressing that “the state will recover the money from Tarom”.

“The situation looks bad at Tarom,” Bode stated, explaining that a genuine restructuring plan needs to be pursued. The company will report EUR 40 mln losses this year alone, he added.

Bode blamed his predecessor Razvan Cuc for having implemented a “restructuring plan” that actually resulted in bigger employment (1,900 after compared to 1,700 before).

He also blamed past management for having signed inappropriate procurement contracts. In this respect, he mentioned the contract for ATR aircraft, which former CEO Madalina Mezei signed on her first day in office without the most superficial verification.

(Photo: Pixabay)

editor@romania-insider.com