Tarom is losing ground in favor of low-cost competition

In the past two years, Romania’s flag carrier Tarom posted significant loss in terms of market share, while low-cost airlines have continued to carry more and more passengers.

Ryanair, the largest European low-cost, could push next year the Romanian airline out of the top 3, after last fall it lost the second position in favor of the local low-cost Blue Air, SeeNews report on Budget Airlines in Southeast Europe 2017 reveals.

The countries envisaged are: Albania, Bosnia Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Romania, Serbia and Slovenia.

According to SeeNews report, the Southeast Europe (SEE), and in particular Bulgaria and Romania, are enjoying a rapid growth in air traffic due to the massive expansion of low-cost lines in 2016. The annual rate of growth on the Bulgarian market was 25.4 percent, followed by Romania with a capacity increase of 21.6 percent. For comparison, the annual growth recorded on the markets in Hungary and Poland was 12.9 percent and 12.8 percent, due to the low-cost expansion.

In 2016, the Romanian market recorded the highest volume of passengers, 11 million respectively, followed by Bulgaria with 9 million passengers and Croatia with almost 8 million passengers.

However, the passengers number carried last year by Tarom remained stable with a slight increase of 1 percent.

A reason for the recent expansion of low-cost carriers (LCCs) in Romania and Bulgaria is the two countries’ EU membership, which allows for free movement of people. Unlike Bulgaria and Romania, however, the flag carriers of Serbia and Croatia stay ahead of the LCCs in terms of passenger numbers, according to the report.

Regarding Ryanair, SeeNews notes that just two years after entering the Romanian market, the Irish company already has one third of the existing capacity in the market. In terms of available capacity, the first position as regards the market share is held by Wizz Air (31.4 percent) followed by Tarom (19.9 percent), Blue Air (19.1 percent) and Ryanair (8.3 percent).

The national flag carrier recently scrapped two Airbus A310 of enhanced capacity. Their high fuel consumption, caused by the physical and moral wear, makes the two aircraft to have no chance against modern aircraft competition on transatlantic routes or to China.