Miami – On October 5, the European Commission approved a loan guarantee of €19.3m (around RON93m) for state-owned carrier TAROM (RO).
The loan aims to compensate RO for losses directly caused by the COVID-19 pandemic as Romania was forced to cancel most of its scheduled flights between March 16, 2020 and June 30, 2020.
Having assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables state aid measures granted by member states to compensate specific companies or sectors for damages directly caused by exceptional occurrences such as the COVID-19 pandemic, the aid to RO was approved.
A Justified Loan
Following an approval of €62m for private carrier Blue Air (0B), a Romanian low cost carrier, the commission found the aid measure to RO to not exceed what is necessary to repair the damages and in compliance with EU state aid rules.
The aid to RO is also being assessed by an independent auditing firm following the release of a draft by the Romanian Ministry of Transport, Infrastructure and Communications (MTIC) of an emergency ordinance regulating the guarantee by the Ministry of Public Finance (MFP) of two bank loans for RO and 0B ensuring “compliance with European State aid rules”.
Romanian air transport was hit hard by the COVID-19 pandemic and the loan to RO should be a progressive step towards a better future for the industry.
Featured image: TAROM Boeing 737-800 at Cluj-Napoca (CLJ) Photo: © Brent Foster – @5starflight