STRIKING BACK AT HEINZMANN Pascariu: "The CEO of Tarom does not comply with the management plan"

The general manager of Tarom, Christian Heinzmann, did not comply with the guidelines set by the directors of the Board of Directors of the Company, Dan Pascariu, the chairman of the Board of Directors. Since his appointment, Mr. Heinzmann has only met about 30% of the measures stipulated in the management plan for Tarom, Dan Pascariu said.

Some of the members of the Board of Directors of Tarom (Dan Pascariu, Valentin Macec, Ciprian Ladunca and Nicolae Demetriade) have brought serious accusations to the executive management of the airline, claiming that the statements of Christian Heinzmann concerning his achievements are "grandiose and inaccurate". The members of the Board of Directors are saying that even though the financial statement of Tarom has improved by 60 million Euros this year, this is mostly due to some circumstantial measures or to some taken by the Board of Directors prior to the appointment of Mr. in the position of CEO, as his contribution was rather small.

They went on to say that the company's profit for the month of May is not relevant for the financial evolution of Tarom. For that reason, the members of the Board of Directors decided to present the activity reports every three months.

Dan Pascariu said that since the appointment Christian Heinzmann as CEO, the members of the Board have asked for a freeze on hiring, the rationalization of the acquisitions, the renegotiation of the ongoing contracts and the preparation of the restructuring. He also claims that the CEO of Tarom allowed several acquisitions to go through and the continuation of hiring without compliance with procedures and without the approval of the Board of Directors: "Mr. Heinzmann has hired approximately 40 people. Even though he was asked to renegotiate the contracts of the employees, he only succeeded in amending one contract. Due to the aforementioned reasons, the Board of Directors has asked Christian Heinzmann to accept the cutting of his term from four years to one year".

The Minister of Transports has sent its Audit Body to Tarom, Minister Relu Fenechiu said yesterday. He went on to say that he wants to check which party is right - Heinzmann who says he has improved the company's results or the members of the Board of Directors who claim that the CEO of Tarom does not comply with his mandate. The Audit Body began its work yesterday and for now, there is no certain date concerning the duration of this process. Following this report, the members of the Board of Directors of Tarom do not rule out the possibility of asking the current CEO to resign.

Dan Pascariu said: "With a loss of 160,000 dollars a day, the airline can't give Christian Heinzmann four years to restructure. Tarom can't afford more than a year and a half for a full restructuring".

Christian Heinzmann recently said that had he not signed the reduction of the mandate from four to one years, he would have been fired. At the time he said that he wanted to talk about clarifying his situation with minister Fenechiu and with other officials, including with Prime Minister Victor Ponta, and that he wants for his term to continue in its initial form: "I want to stay, I love this company, I love this country, I see no reason to leave. At the end of the day, I am just doing my job. I am not a politician". He said that the situation of Tarom is complex and it is improving, but there are more things to do in that regard.

Lucian Isar, who was replaced on the Board of Directors of Tarom at the end of May, recently announced that Heinzmann is doing his job well, that he has taken the company from losses to profit, and that his term was shortened because there are factions interested in having politically nominated managers taking control of Tarom. According to Isar, Tarom will exceed in June, one million of Euros profit, based on estimated data.

Contacted yesterday by BURSA, in order to comment on the statements of the current Board of Directors, he said: "There are some irrefutable elements that not even Mr. Pascariu and the other members of the Board of Directors can deny: the financial performance has improved by 35% compared to the previous year, and June will the first month with a profit of over 1 million Euros. The lesson which the CEO of Tarom gave the head of the Board of Directors on yield management is relevant for the difference when it comes to understanding the level of understanding of the industry. In the case of Tarom, it isn't just the occupancy rate, but also the average revenue per seat, the relevant indicator in the industry".

Nicolae Demetriade, a member on the Board of Directors, was appointed on June 22nd, as the executive director of Tarom. Dan Pascariu justified the appointment of Mr. Demetriade for the position of executive director, as being necessary to spur the accomplishment of the measures stipulated in the company's management plan.

Mr. Demetriade said that his roles also include the potential corrections include the potential corrections to the management plan, the negotiation with the unions and executive delegated duties such as signing some documents, with his intention being to cooperate closely with the general manager in order to rush the restructuring process. Because the appointment of Nicolae Demetriade raised questions about a conflict of interests between the travel agency that his wife owns and the position he holds, the businessman said that he will not take part in any decision of the Board of Directors concerning the competition with the airline company, Fly Dubai. The travel agency of the wife of Mr. Demetriade works with Tarom as well as with Fly Dubai, and both companies have flights between Romania and Dubai.