Romanian state-owned airline Tarom turns to profit in 2018

The state-controlled air carrier Tarom made almost RON11m (EUR2.3m) profit in 2018, turning from more than RON33m loss a year before, according to a release. The company returned to positive result after 10 years on loss. Tarom took advantage of increasing air transport in Romania in the past years and boosted revenues by 21% to RON1.4bn in 2018. The most significant performance was recorded in external routes where sales rose by 22% and the number of passengers by almost 15% y/y. Sales in domestic routes segment increased by 18% and the number of passengers by 40%. The total number of passengers using Tarom for air transport increased by 20% to 2.74mn, the highest in the past 10 years, the company said.

Tarom was the first among state enterprises which benefited from management hired from the private sector, as the IMF advised. The transport ministry had the company on a privatization list a few years ago, but it seems that sale plans were put on hold. Tarom needs serious restructuring as it still faces notable financial problems, mostly due to inefficiency of past management, political bias, weak corporate governance and nepotism. Tarom pays high wages, so the auxiliary staff is mostly represented by relatives and friends of the ruling politicians, according to media sources.

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