Tarom plans 10% job losses through voluntary scheme

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Romanian flag carrier Tarom aims to shed 10% of its workforce over the next two years, largely through voluntary redundancy, as its new chief executive targets a rapid return to profitability.

The SkyTeam member says the "voluntary retirement programme" will start this month and run through 2013 and into the following year if required. The plan was approved at an 11 March board meeting, it says.

"The objective of this plan is to reduce staff [numbers] so that the company's operations are not affected or interrupted," it says. Its goal is an overall 10% reduction, says Tarom.

Losses will be stemmed by 2015, with the airline clawing back around €100 million ($130 million) each year under its plan. A forecast 2013 loss of €143 million will shrink to €18 million in 2014, with profits following in 2015 and 2016 of €92 million and €173 million respectively.

Alongside the job losses, and a raft of other cost-saving measures - including a fleet renewal programme - ushered in by new CEO Christian Heinzmann, Tarom hopes that improved sales and performance will contribute to its profit growth.

It is aiming to be carrying 2.6 million passengers with a load factor of 75% by 2016, rising from 2.3 million and 68% this year.

"We reviewed the situation of the company in a very honest way and we are confident that we can achieve what we have proposed. Beyond getting a positive financial result in 2015, the real objective of our mandate is the company's financial sustainability in the long term," says Michael Moriaty, the carrier's chief financial officer.

Additionally the carrier's maintenance operation, Tarom Technical Division, will also be spun-off into a separate entity in order to better take advantage of its MRO expertise on Airbus, ATR and Boeing aircraft.

It will still be owned by the airline, but in future will be responsible for its own financial performance.