Tarom sharply cuts H1 losses to EUR 14 mln on higher revenues

Tarom, the state-owned airline, said in Thursday it has reduced its losses almost in half to RON 63 million (EUR 14 million) and optimized operations, following the implementation of a management plan that aims to turn around the company.

Dan Pascariu, president of the administration board at Tarom, said the implementation of corporate governance through the private management program is a “success” for Tarom.

“Without ignoring the difficulties of a fresh beginning, the administration board reckons the process of turning around Tarom is on a good path and expresses its hopes that the positive figures registered in the first half will be consolidated through a constant improvement of physical indicators, so as to have a sustainable growth.”

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The airline is one of the few state-owned companies that appointed a professional board of administration and a private CEO.

Tarom’s professional board of administration unveiled in March a management plan outlining the strategy for returning the beleaguered company to profit starting 2015. Tarom still has a long way to go after reporting a loss of RON 236 million (EUR 53 million) in 2012. The board expects the loss to narrow to RON 143 million (EUR 32 million) this year, and further shrink to RON 18 million (EUR 4 million) in 2014.

The company reported a 7 percent increase in operational revenues to RON 534 million (EUR 120 million) and added 1.4 percent in passengers to 974,984.

Christian Heinzmann, executive director and accountable manager of Tarom, said the trend of the results is “encouraging”, adding this is due to the “constant efforts of the employees”. The company recorded a 4 percent reduction in staff to 2006, due to voluntary departures and retirement.

“The positive result is mainly generated by improvements in the commercial area, which lead to an increase of the revenue per passenger. In addition, savings were made for fuel and other costs,” said the company in a statement.

At present, the company has a fleet of 24 planes, operating 42 routes, out of which 9 are domestic.

Ovidiu Posirca