Blue Air is Romania’s second largest airline and it has been taken over by the Romanian state due to massive debt amassed by the operator. The company has been struggling since the COVID-19 pandemic and in September 2022 it was fined 2 million euros for cancelling a huge amount of flights. Since then, it struggled to recover financially.
Nationalization of the Company
Blue Air has been taken over by the Romanian state after accumulating a total of 230 million euros of debt. A percentage of 75% of the company has been nationalized and the state is now looking to save the company from insolvency. The head of the Authority for the Administration of State Assets has spoken about this incident: “We have taken over the shares, the takeover has been completed, and now we are trying to form a new board of directors. The people who are now on the board have not resigned yet, but they will”.
The airline suspended all flights on the 6th of September after the Ministry of the Environment froze the bank accounts of the company due to unpaid debts. Unfortunately, many people have lost their money on the tickets and the Romanian state is currently looking for solutions to help them refund the tickets.
Currently, Blue Air only has two aircraft in their fleet, according to Planespotters. The two Boeing 737-500 aircraft are stuck on the ground until further notice. Blue Air used to have more planes, however after the suspension of flights, they have been returned to LOT Polish Airlines.
Possible Sale of Blue Air
Along with the news of the nationalization of the company, it has also been reported that an investor from the United States of America has shown interest in taking over the airline. All we know at the moment is what Daniel Geanta, head of the Authority for the Administration of State Assets said:
“One of the requirements is that the insolvency proceedings – if it were to go into insolvency – involve litigation under US bankruptcy law, New York state Chapter 11. There is a point where it could make this transfer, but I can’t tell you if it would succeed or not. We have started analysis of this procedure, but the documentation is a thick one, not just a page or two”.
More About Blue Air
Blue Air was founded in 2004 and it was one of the most successful airlines to operate in Romania. Its main hub was at Henri Coanda International Airport in Bucharest and its most profitable year came in 2017, when it carried over 5 million passengers. Since then however, things have gone downhill and the airline did not manage to recover.
The COVID-19 pandemic brought massive debts to the company due to the lack of revenue during this period of time. In 2020, Blue Air received a 65 million euro loan from the Romanian government to help keep it afloat and recover. This did not happen unfortunately, as the airline was forced to cancel its flights after not being able to afford basic things such as fuel.
At the time of its demise, Blue Air was flying to over 20 countries with 75 different destinations. The low-cost airline managed to offer Romanians and other travelers a competitive variant to the bigger low-cost operators like Ryanair and Wizz Air.
We will be documenting the future of Blue Air with great consideration and keep you updated. Until then, let us know what you think about Blue Air’s situation in the comments down below!