Romanian state-owned air carrier Tarom which is on the brink of bankruptcy is asking for state aid worth about 190 million euros.
The government discussed the request at its Thursday Cabinet meeting.
The grant would finance half of the five-year restructuring program, with the rest of the financing being coming from the company’s own sources.
State aid has to be signed off by the European Commission.
Tarom had 29 aircraft in the summer and by the end of 2021 will have only 23.
Transport Minister Lucian Bode told Tarom bosses on Tuesday that the company needed to become profitable “in 4-5 years.”
“Unfortunately we have one boss for nine employees,” the minister said. “There’s 192 bosses in all.”
The minister said some 600 of the 1,700 staff would be laid off as part of the restructuring process.
The program also includes fleet renewal, commercial optimization and attracting additional revenue
The Commission has allowed the government to extend state guarantees for less than 20 million euros which Tarom asked for to cover losses racked up during the lockdown earlier this year. That sum was one-third of the amount the government proposed.
The company had previously received 36.7 million euros in state aid before the pandemic which was meant to cover company’s liquidity needs from March to August 2020.
The pandemic meant that the airline used the money for current expenses.
The transport ministry owns more than 97% of the company.