The European Commission has opened an investigation into Romania’s 190 million euro support measures in favor of Romanian state airline Tarom airline, according to a statement on Monday.
The Commission said it would look into whether the restructuring package for the state-owned flag carrier was in line with EU rules on state aid to companies in difficulty.
Romania plans to reduce costs and renew Tarom’s ageing fleet by means of a capital injection, a direct subsidy and a debt write-off, the Commission said, adding the carrier had been experiencing financial difficulties for years.
In February 2020, the European Commission approved, under EU State aid rules, Romania’s plans to grant a temporary loan of approximately 36.7 million euros to Tarom.
On 28 May 2021, Romania notified to the Commission a plan for the restructuring of the airline, Aviation24.be reported.
In June, Tarom appointed Catalin Radu Prunariu as its new general manager. He was previously the airline’s flight operations director.
The change in the company’s management comes after the aeronautical industry, the passenger transport segment in particular, faced its biggest crisis in history, Tarom said in a press release.
The company noted that it has managed to survive the first year of the crisis due to adjustment of operations and exploitation of new opportunities on the segment of irregular flights.
The funding approved last year was to ensure the orderly continuation of air transport services, in particular on the numerous routes where Tarom is the only provider. The aim was to avoid disruptions for passengers, without distorting competition in the Single Market.
The European Commission’s guidelines on restructuring aid allow member states to support companies in difficulty, under certain strict conditions.
Rescue aid may be granted for a period of up to six months. After that, the aid must be reimbursed or members states are obliged to notify a restructuring plan to the Commission, for assessment under the State aid rules.