Romania lowcoster Blue Air buys Moldovan flag carrier in €61.5mn deal

Romania lowcoster Blue Air buys Moldovan flag carrier in €61.5mn deal
By bne IntelliNews October 3, 2018

Civil Aviation Group, made up of Romanian low cost carrier Blue Air and two Moldovan citizens, has bought Moldovan flag carrier Air Moldova for MDL1.2bn (€61.5mn), Moldova’s public assets agency (APP) announced on October 2.

The government of Moldova approved in July a list of 12 companies to be privatised, including Air Moldova that holds a market share of around 43%. 

Out of the total price offered by Civil Aviation Group, MDL50mn were transferred to the state budget, while the remainder represents Air Moldova’s debt, which the investor has pledged to pay.

The starting price for Air Moldova set at just MDL48mn (€2.5mn), which raised concerns within the country. However, APP head Vladimir Baldovici explained the low starting price to Mold Street in July, saying that government must sell Air Moldova in order to give the company the chance to expand, because the state does not hold the necessary resources. 

Blue Air has the largest share in Civil Aviation Group. On the Romanian market, Blue Air is the second largest player in terms of passenger traffic, transporting 5mn passengers last year, 70% up on the year. Blue Air owns 30 Boeing aircraft and offers flights to 80 destinations.

According to Air Moldova’s development strategy, the new owner of the flag carrier will launch seven new routes by the end of 2019 and four new routes in 2020. In 2021, it is expected that Air Moldova would start operating long-haul flights to the US, Canada, China as well as medium-haul flights. In addition, the frequency of current flights should be increased.

The number of aircraft to be operated by Air Moldova is expected to increase to 14 by 2021. The number of employees is also expected to rise, so that the number of pilots and cabin crew would rise from 180 in 2018 to 380 in 2021.