nicolas75

Mihăiță Ursu - CEO of TAROM as of 4 January 2022 - was dismissed by Sorin Grindeanu, Minister of Transport and Infrastructure.

According to Gāndul sources, Sorin Grindeanu's decision was taken two hours ago, and the new interim CEO of TAROM is Costin Iordache, former TAROM CFO. Costin Iordache thus becomes the fifth director general of TAROM in the last three years.

Mihăiță Ursu - a geodesic engineer and specialist in metal tile sales - has also served as the company's director from June 2020 to June 2021.

The Board of Directors nominated Mihăiță Ursu as CEO in the context of the national airline being in the midst of a transformation process, which started in early 2020 with the access to the rescue loan following the pre-notification to the European Commission of a restructuring state aid.

According to information published on TAROM's website, CEO Mihăiță Ursu had a gross salary of 37,000 lei/month.

"The gross remuneration of the Director General is 37,000 lei/month, in compliance with Article 38, para. 1 of GEO 109/2011 on corporate governance of public companies, with subsequent additions and amendments".

In recent years, the state-owned company TAROM has been managed by:
George Barbu (2019-2020)
Mihăiță Ursu (2020-2021)
Cătălin Prunariu (2021-2022)
Mihăiță Ursu (2022-2023).

The appointment of Mihăiță Ursu as head of TAROM raised many questions and the restructuring plan was challenged.

Mihăiță Ursu, TAROM's CEO, was accused of intending to implement a "disguised collective redundancy" under the "umbrella" of the restructuring plan and, moreover, of pointing an accusing finger at Sorin Grindeanu, the Minister of Transport and Infrastructure.

"TAROM's CEO has a plan to restructure the company by cutting costs, but it is - in fact and in law - a disguised collective redundancy. This is not a restructuring plan, because cutting costs does not mean firing people and rehiring them.

In front of union representatives, general manager Mihăiță Rusu blames transport minister Sorin Grindeanu and says he is to blame, not him.

With this TAROM restructuring plan, Mihăiță Ursu simply wants to trick the European Commission and the Romanian Government into giving him state aid. He has a condition from the European Commission, namely "if you come up with a restructuring plan, then you get the money. If you don't, you don't...", TAROM sources told GĀNDUL.

Source

BA850

They’ve little chance of finding the sort of experienced leader required for 37,000 Lei a month!

That’s only around 6600 GBP, and while salaries are much lower across the board in Romania than Western Europe, Airline CEO is one of those professions for which you need to pay the going international market rate if you’re serious about finding someone who can turn things around.

hugolover

You really think that was his only compensation?
There's no way to turn TAROM around. It's finished. The vet needs to come with their bolt gun.

fifty_two

as hugolover correctly pointed out , many C level executives get paid through various ways other than just regular paycheck as we , commoners , are used to .

This can help with tax optimisation for instance , cause high incomes earners could be taxed a lot depedning on the country

Such topic is discussed behind closed doors during negotiations before the appointment , and some welcome / goodbye packages and also bonuses are often included

As Ursu has been in tarom (or around) for quite some time , no way he would only get 37k per month , trust me , so dont feel sorry about the successors , but rather for romanian taxpayers and RO employees

Quite often the static part of reumuneration is made public , either because of the law or to not irritate unions , but the variable/dynamic is usually kept secret for good reasons

Well , burn it to the ground and then what ??

Start a new structure ? In theory yes , but if you dont solve the issues that existed within and around RO before , it will be just another ITA
Not doing anything ? Then it will automatically reduce competition , therefore increase prices and reduce quality
Let the market decide ? So essentialy it will just give away the country to W6 / FR and the decisions of o'leary + varadi , which are not always legal and/or not in best interest of general public

From a business and government budget perspective it might make sense but who knows what will happen after , dont forget that RO is almost the only skyteam coverage in southeast europe , which is close to nothing since OK, AZ and SU are out

fifty_two

to be deleted - duplicate message

MichielR

And this happened just a day after they announce the new catering box. I think it is only right therefore to fire the CEO

Fabo.sk

They need to gut it and start from scratch, indeed. Yes, structural issues need to be solved, but structural issues will not be solved by letting this skansen of an airline chug along.

I'm no fan of losing ST coverage, but hey, oneworld was already lost years ago due to mismanagement, and ST is in process of the same (OK+RO+AZ), something must be done one way or another. Else we might as well all capitulate to the all-encompassing embrace of Miles&More.

Xandrios

These kind of structural issues are a result of it being a government run airline. To remove these issues at RO one first need to fix the issues at the root.

While I’d be sad to see it happen, the only way I’d see this play out is by W6 and FR take over. Similar to when Malev struggled and eventually was forced to shut down.

Not a good situation for anyone, however, RO fixing itself, or another Skyteam airline taking over, is not very likely in my opinion. RO is not at the scale that AZ was, and therefore there is much less benefit for others to step in (eg AFKL like they did with AZ).

fifty_two

Yes , i am also in favour of doing something , the problem is , i dont see any good solution that will benefit everybody and some in the process will loose a lot

LoL ! better stop flying than going to miles and more !

Seems the most likely outcome unfortunately

Just look at 0B , was a full private airline (as far as i know) and now bankrupt , so it is not only a matter of ownership by state or not

hugolover

If routes need a subsidy, better to a profitable airline that knows how to make money than some opaque state entity that gives free tickets away left, right and centre. Not only that, more of your citizens can benefit which is surely the reason for the airline. All too often, these state airlines are just to support the unaccountable political class, left or right. I note RO has no official state aircraft, but let me guess who gets the tender for VIP jobs?

Especially in poor countries, why should the state subsidise the comparatively wealthy? I'd hazard a guess that in RO, most people find TAROM way too expensive and crap and they prefer W6, FR etc.

Airlines are price takers not makers. If routes need immense subsidy better to ask if the route works at all and if the money is spent better elsewhere in a transparent process.

Nobody will cut off Romania if it's in their financial interest to operate routes. In the short term, you might see some price gouging but its already happening if a route only works on a CR9. If LHG are creaming it, you can bet that AF/KL or IAG will want a piece of it if there's a piece to be had.

The fact TAROM think taking away meals or an olive or whatever is gonna make a difference to viability shows how mad the whole thing is.

Fabo.sk

AFKL and IAG might want to take a piece of the pie but have a distinct disadvantage compared to LHg in that to reach one of their hubs, you have to fly straight across DACH, in case of IAG even further than AFKL, and then, more often than not, backtrack to the actual destination you want. That means the travel time is overall longer and your cost to deliver is higher

hugolover

Sounds optimal for TK and A3?

One must also remember the European Commission's commitment to combat the climate and ecological emergency, which favours green air travel, LCC provide much of that. Typically the newest and cleanest aircraft in European skies and the most dense configuration vs so-called legacy, high fares low service carriers like LH or RO.

Fabo.sk

TK and A3 are just out of the way in the other direction.

Xandrios

A3 is currently already investing in Croatia/OU to expand their network in that direction, leasing aircraft and potentially setting up a hub there at some point in the future. OU's network is highly seasonal, as is A3's, and this is something that A3 has turned out to be rather good at handling. Both are in *A as well. I would not expect A3 to set up shop in Romenia anytime soon.

curiousexplorer

Well curiously Aegean is now adding its 3rd route to Romania and it bought Animawings, which seems that will be renamed "Aegean Airlines Romania" or something similar (at least they reserved the trademark for now).

Meanwhile RO just announced they are cutting OTP - MUC after a recent decision to also cut BCN and VIE. Some are saying LHR and MAD are next, but let's hope they are not right. Until 2024 the company is somehow "forced" to slim down and cut unprofitable routes and contracts, after which in theory it can expand again (especially after it receives the Boeing MAX planes it ordered years ago).