Keyword of TAROM strategy: survival

The almost six months Ruxandra Brutaru has been at the helm of the biggest airline on the Romanian market, Tarom, a state-owned company, are highlighting the new executive’s attempt at keeping the company afloat, considering that even Brutaru confesses survival is the keyword this year.

“All indicators were falling at the start of the year and in terms of the average income per passenger we had a disastrous situation,” said Ruxandra Brutaru. Tarom, with turnover worth almost 298m euros last year, in the first four months of this year posted a 15% decline in the number of passengers, to 437,000 persons, according to the data provided by the Association of European Airlines (AEA). The load during the January-April period stood at 48%, down around 11.9% from the same period of last year, positioning the company at the bottom end in the ranking of AEA-member operators. With these figures, Brutaru admits taking over the company’s reins “was a very heavy legacy for me”. “We’re monitoring the load level, the average income per passenger and the number of flights operated per year, as representative indicators for our business,” explains the executive of Tarom, a company planning to reorganise expenses, “without making personnel moves for the time being”. Since early 2009, the company has given up 355 flights and operating expenses implicitly went down by 30m dollars (21m euros). The company has almost 2,500 employees. “According to AEA standards, the number of employees is not high,” said Brutaru. Still, personnel and fuel expenses account for almost 50% in total expenditures. The state-owned firm’s market strategy is not one against low-cost carriers, as “if you start a war with low-cost carriers, you surely stand to lose. The strategy we have entails manoeuvring costs to survive. (…) We want financial balance,” said Brutaru. “(…) We are healthy and we can cope with last year’s losses,” she also said, adding all budgets for this year were cut, but that there was still money earmarked for promotion, almost 1.2m euros, as the company’s image is important.