Tarom Romanian Airlines is preparing to hive off its unprofitable domestic routes and part of its regional operation to a new private enterprise, DAC Air.
At presstime, the Romanian government was negotiating the conditions of the transferral of route rights with George Paunescu, entrepreneur and chairman of the proposed startup, following the signing of a memorandum of understanding between Tarom and DAC Air.
Tarom would take a 15-20 per cent stake in the new carrier, says chief executive officer George Racaru. Initially DAC will fly all domestic operations and may later take over regional routes such as Thessaloniki, Istanbul, Sofia, and Kiev.
Tarom, which carried 1.4 million passengers in 1994, has been subsidising domestic operations with the more profitable long haul routes, says Racaru. In 1994 Tarom posted a loss of $9-10 million on a turnover of $200 million. Racaru attributes the loss to the financial burden of upgrading its mainly Russian long and medium haul fleet with B737s and A310s.
Domestic losses are primarily due to operating the wrong aircraft, admits Racaru: a mix of An-24s and An-26s. 'Strategically we have been focused on replacing the long and medium haul fleet. The domestic fleet has been rather relegated to third place,' says Racaru.
DAC Air plans to begin services in May with four de Havilland Dash 8-300s and four Canadair RJs. Racaru says this is the right fleet strategy but quashes the rumour that he will head DAC Air's operations. 'I had an offer, but I decided not to take it up at the moment.'
Sara Guild
Source: Airline Business
