Tarom chief promises complete fleet revamp

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Romanian flag carrier Tarom plans to completely replace its fleet in the coming years as it targets a single-type operation.

Christian Heinzmann, who was appointed as chief executive of the SkyTeam member in November, is conducting a root and branch analysis of all aspects of the loss-making airline in a bid to return it to profitability.

He believes that it can achieve cost and efficiency savings of as much as 35% through the harmonisation of its fleet.

At present it operates a total of 24 aircraft, including a pair of 209-seat Airbus A310s, narrowbody jets from both Airbus and Boeing - incorporating several older-generation 737-300s - and ATR turboprops. The huge fleet variation causes unnecessary maintenance and training costs, says Heinzmann.

The initial findings of a market analysis carried out by Tarom suggests the ideal aircraft would have between 90-100 seats, he says.

No manufacturer has so far been selected, he adds, but the airline is evaluating proposals from the incumbent jet providers alongside Bombardier, Embraer and Mitsubishi Aircraft.

"All of them are offering good packages of serious economies of scale and fuel reductions," he says.

Assuming an order is placed relatively swiftly, new jets could begin arriving in 2014, says Heinzmann, beginning the "gradual phase out" of its older aircraft which could take "a couple of years" to complete.

Heinzmann says the selected aircraft will be able to operate on all its routes, leading to greater fleet flexibility. Although any order will be capped at 24 units, Heinzmann hopes increased fleet utilisation will lead to additional savings. "I would rather increase frequencies than aircraft," he says.

The carrier will also begin a "much more aggressive" sales effort as it aims to increase load factor from 65% to a "good European average" of around 75%.

It is aiming for breakeven in 2015 and profitability in 2016, he adds.

As part of the broad review of its operation, even its membership of the SkyTeam alliance is being reviewed, says Heinzmann. "I am not saying we should leave, but it has to be really working to our advantage, not the opposite."

Romania's government is still pressing ahead with its plan to sell a 20% stake in the carrier by the end of 2013, although "even without [new capital] it can survive", he says.

In the year to 31 December 2011 the carrier lost New Lei 262 million ($74.9 million).