TAROM

State aid: European Commission approves €19.3 million Romanian loan guarantee to compensate TAROM for damage suffered due to the coronavirus outbreak

Share

The European Commission has approved, under EU State aid rules, a loan guarantee of up to around €19.3 million (approximately RON 94 million) in favour of the Romanian state-owned airline TAROM.

The measure aims to compensate the airline for the losses directly caused by the coronavirus outbreak and the travel restrictions introduced by Romania and other destination countries to limit the spread of the coronavirus in the period between 16 March 2020 and 30 June 2020. This has forced Tarom to cancel most of its scheduled flights and caused major losses in turnover.

The public support will take the form of guarantee to market loan(s).  The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors (in the form of schemes) for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak. The Commission found in particular that the Romanian measure will compensate damage that is directly linked to the coronavirus outbreak.

An independent external audit firm will verify that the aid does not exceed the amount of damage suffered during the period between 16 March and 30 June 2020. Following the audit, any public support received by TAROM in excess of the actual damage suffered will have to be returned to Romania. The risk of overcompensation is therefore excluded.

The Commission also found that the measure is proportionate as the compensation does not exceed what is necessary to make good the damage. On this basis, the Commission concluded that the Romanian measure is in line with EU State aid rules.

This post was published on 5 October 2020 19:05

André Orban

M. Sc. Engineering

Published by
André Orban

Recent Posts

United Airlines CEO tries to reassure customers after a series of incidents

United Airlines CEO Scott Kirby reassured customers about the carrier's safety following a series of…

18 March 2024

Korean Air to expand international services for summer 2024

Korean Air is ramping up international flights for summer 2024, bringing their capacity close to…

18 March 2024

AirAsia Cambodia ready to take off, starting with three domestic destinations

New airline AirAsia Cambodia is launching domestic flights in Cambodia starting May 2, 2024. They…

18 March 2024

One year of Green Fares at the Lufthansa Group

More than one million passengers choose new fare for more sustainable travel In the year…

18 March 2024

Brussels Airlines reaches agreement with cabin crew unions about reward package

Brussels Airlines has successfully negotiated an agreement with cabin crew unions regarding their reward package,…

18 March 2024

Brussels Airport: A vital economic hub generating over 64,000 jobs and €5.4 billion for Belgium

The economic impact study conducted by researchers from the University of Antwerp and UCLouvain reveals…

18 March 2024