The national airline TAROM recorded losses of nearly 200 million RON in 2019, and in 2020 it will have to pay 15% advances for the acquisition of 5 Boeing MAX aircraft with a 2023 delivery deadline. In 2018, Tarom recorded losses of up to 180 million RON.
Lucian Bode, the proposed minister for the Transport, Infrastructure, and Communications portfolio, mentioned that the year 2019 will end with losses of nearly 200 million lei, and no solution other than granting rescue aid could have been found.
He specified that the rescue aid must be returned within 6 months if the European Commission does not accept the restructuring plan. If until now there were still solutions to exit this situation, in which the company has previously faced huge losses, I tell you very clearly: today, there is no other solution than the fundamental restructuring of this company, Bode declared.
Regarding the five Boeing MAX aircraft, the proposed transport chief emphasized that it is serious that this contract was signed without a financing source.
“What is very, very serious for this company is that in 2018 it signed a contract for the acquisition of five Boeing MAX aircraft with a 2023 delivery deadline, without having a financing source. In 2018, the company paid an advance of 8 million dollars. Tarom was supposed to pay a new advance in 2019. It will have to pay in 2020. The advances amount to 15% of the contract value. Currently, Boeing has committed to delivering the aircraft by the set deadline, and we are renegotiating the payment of advances. The company is currently looking for financing methods for the remaining 85%, which will have to be paid by 2023,” Lucian Bode added.
Source: Wall-Street
Frequently Asked Questions
What were TAROM’s financial losses in 2019?
TAROM recorded losses of approximately 200 million RON in 2019, following a loss of 180 million RON in 2018.
What is the situation with the Boeing MAX aircraft order?
TAROM ordered five Boeing MAX aircraft for 2023 delivery but lacked a financing source at the time of signing. The company must pay 15% in advances by 2020.
What is the proposed solution for TAROM’s recovery?
The proposed solution involves a fundamental restructuring of the company and the granting of rescue aid, which must be approved by the European Commission.