EU Commission approves €95 million restructuring aid for TAROM

The European Commission has approved, under EU State aid rules, Romania's plans to grant the Romanian state-owned flag carrier TAROM restructuring aid for up to €95.3 million ($101.8 million). The EU Commission said in a press release that the funding would restore the airline's long-term viability while minimising competition distortions. ""The Romanian restructuring aid approved today will help maintain regional connectivity of Romanian citizens and businesses,"" said EU Commission executive vice president of competition policy Margrethe Vestager. ""Following our in-depth investigation, we concluded that TAROM’s restructuring plan will ensure that the airline becomes viable in the long term."" Romania had notified the Commission of its restructuring plan in May 2021, which set out how it would streamline TAROM's operations, renew its aging fleet and reduce costs. After an in-depth investigation opened in July 2021, Romania updated the measures, which now includes a debt write-off of nearly €50 million ($53.4 million) corresponding to the rescue aid amount that was approved in February 2020 plus interest and a capital injection of approximately €46 million ($49.1 million). Vestager added: ""To limit any possible competition distortions triggered by the public support, TAROM will significantly downsize its number of routes and aircraft."" The reduction of the number of routes, as well as maintaining a reduced capacity, is part of the safeguards that came with the aid in order to limit distortions of competition in the single market.