Andrew Doyle/MUNICH Arie Egozi/TEL AVIV
Romania's Tarom is to drop loss-making routes and shed 10% of its workforce as part of a cost-cutting drive after being handed an $11 million lifeline by the state-owned Exim bank. Zeevi group, 75% shareholder in grounded Balkan Bulgarian Airlines, has meanwhile presented a recovery plan to the Bulgarian Government.
Tarom lost around $50 million last year, but hopes to save $12.3 million annually with the new plan. It has dropped flights to Chicago and will reduce frequencies to Dublin and Tripoli, while increasing service to New York Kennedy. Around 300 jobs will also go.
Plans to privatise the airline remain suspended pending the restructuring - aimed at making it more attractive to international investors, which have shown little interest - and Romania's Authority for Privatisation and Administration of State Ownership says no decision is due in the near term.
New general manager Nicolae Demetriade says fleet renewal is a top priority, with Tarom's two Airbus A310-300s likely to be replaced by A330s, although a contract has yet to be signed. The first of eight Next Generation Boeing 737s ordered by Tarom is due to arrive in April.
The current fleet features eight 737-300s and a pair of 737-500s, plus seven ATR 42-500 turboprops, in addition to the A310s. Two 707-320Cs which are used for cargo flights are being withdrawn from service and will be offered for sale.
Zeevi's recovery plan for Balkan meanwhile demands that Bulgaria freezes the airline's debts until it achieves an operating profit, while injecting $15 million to compensate for what it says was an initial over-valuation of the carrier. The Israeli group also wants fee hikes at Sofia airport to be shelved, and says it will deliver on promised investment of $100 million. Zeevi has simultaneously initiated bankruptcy proceedings, should the government fail to accept the plan.
Source: Flight International
