TAROM adds 11 new routes from Bucharest in a year; LCCs pose growing threat

Image: Tarom stewardess
TAROM expands its network: Between June 2009 and March 2010 the airline will have launched 11 new routes from its main base at Bucharest Otopeni airport. The passengers on the airline’s first flight to Belgrade, which took place in December, were given a ‘New Route Certificate’ as a memory of the event.

Image: Ruxandra BrutaruThe Romanian national carrier TAROM is trying to wash off its image as the old and unfriendly, state-owned alternative. Its new, modern image should be helped by the company’s young CEO Ruxandra Brutaru, who took up the position a year ago at the age of 29.

TAROM was also invited to become an associate member of the alliance SkyTeam in 2005 and the process is expected to be completed later this year, then having taken five years to accomplish.

Chart: Tarom traffic 2002-2009
Source: AEA

The airline had experienced consistent passenger growth during the last decade, until a fall was recorded last year. The greatest growth took place in 2007, when Romania joined the EU and became a part of the liberal, internal air transport market. The passenger numbers then increased by 32% compared to the previous year.

TAROM’s load factors have, however, been lower than those of its competitors, peaking at just over 67% in 2007. For 2008 and 2009, TAROM appears to have forecast further strong growth and increased its capacity (measured by ASKs) by 11% and 3% respectively. Passenger numbers have, however, not met expectations and only grew by 2% in 2008, resulting in a falling load factor. The following 7% fall in 2009 further reduced the average load factor down to 55.6%. This is the second lowest load factor recorded last year by any member carrier of the Association of European Airlines, after Jat Airways.

Chart: Seasonlity
Source: AEA

Since Romania joined the EU, TAROM’s seasonality profile has become more pronounced. In 2006, the peak to off-peak ratio was 1.5, but has since 2007 not been lower than 1.7. A possible reason for this could be increasing numbers of migrant workers returning home during the summer holidays.

Image: I want to be a stewardess
TAROM’s new, modern image: The airline was prominently featured in the Romanian reality TV show “I want to be a stewardess”, in which the contestants were meticulously tested for the position as cabin crew for TAROM. Even if you can’t understand the language, anna.aero assures that the show is highly entertaining. Click here to watch online.

Wizz Air and Blue Air a growing threat

The domestic Romanian market, of which TAROM has a 63% share of capacity, accounts for 29% of the airline’s total seat capacity. The remaining seats are offered on international services.

Chart: International share
Source: OAG Max Online for w/c 1 February 2010

Although TAROM leads the international traffic out of Romania with a 21% share of seat capacity, low-cost carriers Wizz Air and Blue Air are not far behind. In fact, because of higher load factors, Wizz Air can be presumed to be leading the market in terms of flown passengers.TAROM has a 43% share of capacity at its hub at Bucharest’s main airport Henri Coandă in Otopeni (OTP), but only a 32% share of the total Bucharest market, because of the emergence of low-cost services at the secondary airport Aurel Vlaicu in Băneasa (BBU).

Although Italy, where it is estimated that over a million Romanian migrant workers live, is the largest international air transport market from Romania as a whole, the country market only ranks number six for TAROM, behind Spain, Germany, France, Austria and Belgium. The competing airlines Wizz Air, Blue Air, Carpatair and even Alitalia are all bigger on flights between the two countries.

Mixed fleet increasingly operates through Bucharest hub

Image: Tarom airlines
Within a month of each other, routes were launched to Zurich and Lyon from TAROM’s Bucharest hub. A classic sign of an airline faced with liberalisation, TAROM has increased its hubbing in the last year.

TAROM operates a mixed fleet that includes the less common Airbus aircraft types A310 and A318, of which the airline operates two and four respectively. The remaining fleet is divided between a regional fleet of seven ATR-42s and two ATR-72s, and a fleet of eleven Boeing 737s; four -300s, four -700s and three -800s.

In the last year, TAROM has dropped three routes; from Cluj-Napoca to Bologna as well as Paris Charles de Gaulle and from Bucharest Otopeni to Amman in Jordan. In return, ten new routes have been started, all but one from Bucharest Otopeni, with Nice and Riga services scheduled to start at the end of March. This development reveals that TAROM is focussing on operating through its Bucharest hub.

Start date Origin Destination WF*
01-Jun-09 Bucharest Otopeni (OTP) Venice (VCE) 4
04-Jun-09 Bucharest Otopeni (OTP) Constanta (CND) 3
04-Jun-09 Cluj Napoca (CLJ) Constanta (CND) 2
06-Jun-09 Bucharest Otopeni (OTP) Amsterdam (AMS) 7
18-Jun-09 Bucharest Otopeni (OTP) Dubrovnik (DBV) 2
03-Aug-09 Bucharest Otopeni (OTP) Zurich (ZRH) 5
02-Sep-09 Bucharest Otopeni (OTP) Lyon (LYS) 4
26-Oct-09 Bucharest Otopeni (OTP) Budapest (BUD) 4
07-Dec-09 Bucharest Otopeni (OTP) Belgrade (BEG) 3
11-Dec-09 Bucharest Otopeni (OTP) Bari (BRI) 3
28-Mar-10 Bucharest Otopeni (OTP) Riga (RIX) 4
28-Mar-10 Bucharest Otopeni (OTP) Nice (NCE) 2
Source: anna.aero database
WF*: Weekly frequency

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