Romania must recover 35.6 million USD it provided to now bankrupt air carrier Blue Air, as it violated EU state aid rules, the European Commission says.
The European Union executive body’s decision comes after it investigated the viability of Blue Air’s restructuring plan and the aid measures implemented to support it and found them inadequate, ch-aviation reported.
Blue Air already had financial troubles in 2019, the years before the pandemic. It received approval from the Brussels in August 2020 for aid totaling around 65.4 million USD to offset the downturn in business caused by the pandemic. The aid included a public guarantee of some 29.8 million USD and an public guarantee on a rescue loan to address liquidity needs.
Bucharest committed to submitting either a liquidation or a comprehensive restructuring plan for Blue Air if the public guarantee on the rescue loan exceeded six months from when it was disbursed in October 2020. It submitted a plan in April 2021, which was subsequently updated multiple times.
An investigation revealed that “the restructuring plan for Blue Air was not feasible, coherent, and sufficiently far-reaching to restore the airline’s long-term viability within a reasonable time-frame and without unduly distorting competition in the single market,” the Commission’s statement on Feb. 16 said.
Blue Air requested insolvency proceedings in March 2023, reported.
Under EU state aid rules, member states can support distressed companies under strict conditions, but aid beyond a six-month rescue period must either be reimbursed or involve the submission of a restructuring plan for assessment.
Concessions for Ukrainian farmers equates to strain for Romanian farmers
