Emirates and Qatar Airways Vie for Majority Stake in Romania’s TAROM

Two national carriers in the GCC region – Qatar Airways and Emirates Airlines – are in discussions to buy at least 51% stake in TAROM, the troubled national carrier of Romania, which has been facing financial difficulties for the last 17 years.

TAROM’s problems surfaced much before COVID-19 outbreak as financial performance has nosedived significantly since 2015 when it reported a loss of $14.07 million. The carrier posted a loss of $42.2 million in 2018, and $39 million in 2019. The airline’s biggest loss $97 million in 2020 though the performance in subsequent years has been slightly better.

TAROM received a reprieve four years ago, albeit temporarily, when the European Commission (EC) provided a rescue loan of around $45.63 million under EU state aid rules.

The Romanian government is reportedly negotiating with the two airlines coinciding with its Prime Minister Marcel Ciolacu’s visit to the GCC countries. However, the deal has to wait till the end of the EC’s recovery program in 2026.

In exchange, the airlines can construct a new terminal at Otopeni Airport and Ciolacu will have a discussion with the members of the Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar. However, Ciolacu said that he has not yet had an applied discussion on the topic of TAROM.

He said that Romania’s priority is the Port of Constanta, which has become the most important distribution hub on the Black Sea for Central and Eastern Europe. Romania is keen to develop the port to play a key role as a logistics platform as part of the recovery and reconstruction process of Ukraine.

“We need the experience of Qatari companies in terms of port management and operations, as well as the possibility of other infrastructure projects, including the development of the capacity of the Traian Vuia International Airport in Timisoara, the financing of the construction of the Comarnic – Brasov highway and the modernization of the Predeal – Brasov railway,” he said.

Weighing Options

One option is Emirates Airlines, the world’s fourth-largest carrier with 300 aircraft in its fleet and routes to 150 cities in 85 countries. The UAE’s national carrier was also named as the best airline in the world for 2023.

Another option is Qatar Airways, which has 200 aircraft and flies to more than 170 global destinations. Ciolacu wants to attract investments to the tune of $15.97 billion from Qatar.