The Romanian low-cost airline has financial problems. That's why Blue Air filed for creditor protection.
The government in Bucharest rushed to help in April. It approved an emergency loan of 65 million euros each for the national airline Tarom and the low-cost airline Blue Air. This should enable the country’s two major airlines to make it through the corona crisis.
But the state money is not enough, as Blue Air’s turnover between the beginning of March and the end of June was around 100 million euros lower than expected. Therefore, the airline had to apply for creditor protection on Monday (July, 6).
18 months for restructuring
The procedure, which is similar to chapter 11 in the USA and aims at restructuring, should allow the airline to recover. A restart in mid-July should enable Blue Air to pay its running costs and not be slowed down by other financial obligations such as interest payments. It wants to have completed the process and reached an agreement with its creditors within 18 months.
The airline owns a fleet of 30 Boeing 737. Until recently, the German logistics group Zeitfracht had a stake in Blue Air.