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July 16, 2024
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Romanian State to Become Main Shareholder at Blue Air

Blue Air is to become the second state-owned airline company in Romania, along with TAROM. According to sources, the Romanian state is preparing to execute the loan guarantee after Blue Air failed to pay back the installments and interest for the EUR 60 million the company received in 2020. That would make the state owner over 75% shares, making it the main shareholder.

At that moment, in a pandemic crisis, Blue Air and TAROM were in trouble, and the state decided to help both companies with a EUR 124 state-guaranteed loan. Unfortunately for Blue Air, this loan hasn’t helped the company much.

The problems at Blue Air continued long after the loan was granted. After in July 2020 the company entered concordato preventivo, two years after, in July this year, the company was fined by the consumer protection watchdog EUR 2 million for cancelling flights.

On top of that, in September 2022, Blue Air suspended all flights. The decision came as the Romanian Agency for Environment blocked the bank accounts of the air company for a substantial debt to the environment fund. The obligation of the air company to the Environment Fund is EUR 5,7 million. Later, this decision of the Romanian authorities proved to be abusively taken, but it was too late for the company.

Will Blue Air survive as a state-owned company? It is difficult to tell at the moment. TAROM, the other state-owned company in Romania, is not thriving, but it barely survives year after year, with management more focused on trying not to increase its losses than to make a profit.

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