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Freshly selected management at Tarom preparing a new restructuring plan

Todd is Back

Well-Known Member
Dan Pascariu chairman of Tarom Romanian board of directors announced that a draft of a new restructuring plan for the ailing national airline is in the works and likely to be finalized by the end of February next year. The airline’s short term goal for 2013 is to reduce its operating costs by 30 % through personnel furlough, aircraft type and fleet optimization, routes and slots reallocation.

Todd is Back

Well-Known Member
Tarom: Private Management update as of Feb 27, 2013

What’s at stake is the company itself carrying as a profitable business by 2016. The new CEO, Christian Heinzmann is confronted with a multitude of snags and hitches that are thwarting at the moment the reorganization process.

Accordingly to Heinzmann, during his first three months on the job, he faced an unexpected high-level of bureaucracy at all levels. Tarom airline is a state-owned company and as such is subject to inflexible, outdated Romanian legislation dealing with Romanian state owned companies called “Societati Nationale” As a result, lengthy periods of time and “patience” are needed in order to render some board resolutions into practice. Employee’s active resistance to change a reality, resulting in time consuming/wasting and increasing board of directors frustration on bringing needed structural changes and novelties fast enough trough the ranks. Every employee’s general belief and expectation (various union leaders included ???!!!) is that “they have to be consulted and have a say on every single final outcome”

A mid-February restructuring proposal by the new CEO is currently in the process of being made-up palatable to the banks, but it’ll have to be passed through the board first - on or around March 1, 2013 - prior to enactment.

What’s to be expected from Tarom’s new restructuring plan:

Effective immediately closing down Tarom’s agencies in Vienna, Paris, Frankfurt, Rome, London, Budapest, Tel Aviv. Maintaining ticketing stations at certain airports pending demand/sale volumes. Marketing / ticket sales has to become a proactive pursuit for all Tarom’s agents.

Replacing current online Amadeus reservation platform, with its own, in-house reservation system, similar to those featured by low-cost operators on their websites.

A new personnel manager was selected / employee’s file review process is reported to be in progress /some cases of employee abusing the system are to be investigated shortly.

Between 30 to 40 supplier-contracts are under scrutiny / management committed to launch contract renegotiation or buying out procedures as each case maybe. Among suppliers OMV, Air BP, Bucharest Henri Coandă Airport, Alpha Rocas catering, etc

Increasing aircraft “time in the air” from eight to fourteen hours a day, while shortening current “turnaround time on the ground” from 3 hours to only 45 min

More flying destinations in the pipe-line

All other Tarom’s departments (maintenance included) are currently under the new management scrutiny in order to identify redundancies and implement required measures to further cut maintain and control the associated costs.

Starting in 2014 management is planning to engage in discussions with mainstream-aircraft manufacturers in order to explore future fleet renewal. It appears that Mitsubishi MRJ is to be considered and included on Tarom’s short list of possible options.

Tarom’s management to evaluate and decide on SKYTEAM membership efficiency.