Blue Air Faces Scrutiny over Government State Air Grants

DALLAS - The European Commission has announced that it has launched an in-depth review into state aid granted to Romanian low-cost carrier Blue Air (0B).

The struggling airline, which had been fraught with financial troubles since 2019, suspended operations on September 6, 2022. The move came after the Romanian government seized its bank accounts owing to millions of dollars of owed debt. A restructuring plan was put in place, with the government putting up a loan of US$66.9m and offering 75% of 0B stock as a guarantee.

Return to the Air?

Part of the restructuring plan looked at relaunching the carrier with a significantly reduced network and fleet. However, these plans are yet to come to fruition. Its Air Operating Licence (AOC) was suspended, albeit temporarily and on March 21, 2023, the airline filed for insolvency.

And it is these restructuring plans that the Commission has questioned, claiming that they do not fall within EU State aid rules. In a statement, it said, "The Commission has concerns that the restructuring plan and the aid measures implemented are not in line with EU state aid rules."

The review will now look to see if the restructuring plan can return the carrier to the air and ensure its long-term viability without the need for additional funds.

https://airwaysmag.com/romania-majority-stake-blue-air/

Featured Image: Blue Air's 737-8s were transferred over to LOT Polish Airlines (LO). Photo: Photo: Fabrizio Spicuglia/Airways.