Romanian flag carrier Tarom reports losses amid claims of “sabotage” by new CEO

Romanian flag carrier Tarom reports losses amid claims of “sabotage” by new CEO
By Iulian Ernst in Bucharest May 25, 2017

Romanian flag carrier Tarom remained in loss last year after it stopped operating two of its aircraft and was “sabotaged” from inside and outside, new company CEO Eugen Davidoiu stated on May 24 at the launch ceremony for the first of two new replacement aircraft that will operate under a 10-year leasing contract.

The company, which last posted a profit in 2007, seems to have gone from one crisis to another. Last year, Tarom lost the leading position on the local market, after it was surpassed by low-cost carrier Blue Air. 

“It is my personal opinion that Tarom was sabotaged both from the inside and the outside, by those interested in preventing this company from becoming profitable and efficient. There must be institutions already investigating this,” stated Davidoiu. 

He added that the former management of the company took no steps to replace the two aircraft that went out of use last year or to replace the lost capacity. He stressed that the two new aircraft (of which the first was received on May 24) were selected through a transparent tender procedure.

The company should break even this year, Davidoiu predicted, reiterating a target envisaged by the state-controlled carrier for the past few years. The two new Boeing 737-800 NGs leased this year should contribute to this target. He added that the company should re-define its strategy and decide how many and what type of aircraft it needs.

The new managing board, appointed this year by the government after the general election last December, has been broadly criticised for its lack of experience and its political bias. 

New members of the managing board include Razvan Alexandru Marica (32), who has no past experience relevant to the aviation industry. However, Marica was a business associate of relatives of a local Social Democratic Party leader Niculae Badalau. Another new member of the board is Alina Georgeta Velicu (32) who started her career as corporate sales manager at a small telecom dealer owned by Orange Romania. Both new, young members are from Giurgiu, where the PSD organisation is headed by Badalau. The new president of the managing board is 62-year-old Silvia Popeanga, who does come with some experience in aviation as representative of the government in state-controlled companies, and is retired. 

In March 2016, the managing board of the company dismissed former CEO Christian Heinzman and appointed an interim CEO (Gabriel Stroe). Heinzman was appointed under the law on private management at state-owned companies that was aimed at improving corporate governance of state-controlled companies. However, his performance was said to be disappointing and he had conflicts with the managing board who were appointed under the same law.