Blue Air, the largest Romanian airline in terms of number of passengers, announced it broke even in the 12 months ending September 30 (FY2019), when it achieved a €3.4mn net profit before the costs of restructuring the fleet and operations, compared to €24.4mn losses in FY2018.

The company has already started streamlining its operations and will continue the process, Blue Air CEO Oana Petrescu, who took up the position this spring after a career with Arthur Andersen, Ernst & Young, and Deloitte, announced. 

To support the process, Blue Air will issue €50mn-60mn bonds and is considering listing its shares on the Bucharest Stock Exchange (BVB) two years later, once the profitability ratios allow such a move.

“This is the funding we need to resume growth,” Petrescu explained. She said the company must first reach a profit rate of 10%-15% for the listing of the company’s shares to make sense.

The operating profit for the FY2019 reached €8.9mn, compared to €19mn operating losses in the previous 12-month period. The annual revenues were around €390mn.

"We are pleased to announce an improved financial performance in 2019: reaching the break-even point, after three years of financial losses due to accelerated operational growth, is an important achievement for Blue Air,” said Petrescu.

Petrescu pledged to turn Blue Air into a genuine low-cost airline, since it has “lost its low-cost roots” by not observing its luggage policy and offering free meals while still selling cheap tickets.

"The low-cost business model is the only profitable long-term mode,” Petrescu said. It has a very good rate of return and offers the possibility of scaling and quick readjustment, she argued. The lack of transparency and sustainability, when the partners do not see consistency and that what you do does not make sense, are some of the dangers that the company can face, she explained, pointing to the causes of the problems in the past.