PRESS RELEASE Clarifications regarding Cluj “Avram Iancu” International Airport

Clarifications regarding the situation caused by the changes brought by Cluj County Council decisions regarding the management system of Cluj “Avram Iancu” International Airport

 

Cluj-Napoca, October 11, 2017: Given the statements that reached mass media, following the adoption of County Council Decision no. 220/22.09.2017 and County Council Decision adopted on October 9th, 2017, Cluj “Avram Iancu” International Airport wishes to make the following clarifications:

 

About the need to apply the provisions of Government Emergency Ordinance (GEO) no. 109 / November 30, 2011 at the Self-Governing Company Cluj “Avram Iancu” International Airport

As stated in the text of GEO no. 109/2011, the lack of performance in state-owned enterprises (self-governing companies and companies), the financial crisis and the impetus of the International Monetary Fund, supported by the European Commission and the World Bank, led in 2011 to measures being taken for the governance of public enterprises, measures which were established by the aforementioned law.

Thus, the governance system introduced by GEO no. 109/2011 aims at increasing the performance and efficiency of state economic operators by implementing mechanisms already applicable to private companies.

Specifically, GEO no. 109/2011 made a separation between the public tutelary authority, the Board of Administration of a self-governing company and its executive management, establishing for each party specific legal attributions.

The competent tutelary authority, because of the application of GEO no. 109/2011, is no longer in the position of exercising any legal power of direct intervention over the Board of Administration or executive management bodies of the self-governing company.

This type of organizational governance brought by GEO no. 109/2011 aimed at transforming state-owned enterprises into self-governing or competitive trading companies that would bring profit and support the national economy, including through the creation of new jobs directly and indirectly.

 

About the Cluj County Council Decision (CJC Decision) no. 220 / 22.09.2017

Only one day after celebrating together with Cluj County Council the achievement of the threshold of 2,000,000 passengers, on 22.09.2017, the same institution adopted CJC Decision no. 220 / 22.09.2017, through which the termination of the mandate contracts of the members who make up the current Board of Administration of the Airport is concluded.

At the same time, CJC Decision no. 220 / 22.09.2017 appoints the new non-executive administrators selected for the establishment of the new Airport Board of Administration, which is due to begin its mandate on 17.10.2017.

According to art. 5 of this CJC Decision no. 220 / 22.09.2017, starting with 17.10.2017, the Executive Management of the Airport is taken over by the new Board of Administration.

Specifically, it is established that starting with 17.10.2017, the Executive Management exercised to this date by the Managing Director of the self-governing company will be provided by the new Board of Administration, contrary to the provisions of the Managing Director’s mandate contract concluded with the self-governing company.

Moreover, according to par. 7 of the same art. 5, the Board of Administration is mandated by Cluj County Council to terminate the individual work contracts of the other directors of the Airport.

Despite the fact that GEO no. 109/2011 establishes in a clear and unequivocal way the imperative interdiction of the intervention of the tutelary public authority in the administration of a self-governing company, however, through the provisions of art. 5 of CJC Decision no. 220 / 22.09.2017, Cluj County Council imposes the effective way of executing the administrators' mandate.

 

About the Cluj County Council Decision adopted on 09.10.2017

On 09.10.2017, Cluj County Council adopts a new CJC Decision amending the provisions of article 5 paragraph (2), paragraph (3) and (4) of CJC Decision no. 220 / 09.22.2017.

Thus, according to the modification made by the Cluj County Council, for the period between 17.10.2017 and until the date of the appointment of the Managing Director, following the application of the evaluation or selection procedure provided by GEO no. 109/2011, the Executive Management of the Airport is delegated to a provisional Managing Director.

According to the provisions of GEO no. 109/2011, this can only be implemented if the position of Managing Director remains vacant, at which time the Board of Administration may designate an interim Managing Director. This situation is not applicable to the self-governing company, as the mandate contract concluded by the current Managing Director with the Airport, is valid until the completion of the evaluation or selection procedure of a new Managing Director. The other provisions of CJC Decision, including those on termination of individual work contracts of the other directors of the Airport remain according to the Decision no. 220 / 09.22.2017.

Both CJC Decisions’ provisions no. 220 / 22.09.2017, as well as the Decision adopted on 09.10.2017, referring to the actions established and approved by the Cluj County Council for the Board of Administration of the Airport, regarding its executive management, manifestly interferes with GEO no. 109/2011.

 

About the functioning of the Self-Governing Cluj “Avram Iancu” International Airport

Cluj “Avram Iancu” International Airport, before being a self-governing company established by an administrative-territorial authority, is an aerodrome that provides the necessary infrastructure for air transport to Romania, Europe and the whole world and has to comply with certain strict provisions of legal aviation.

Based on this legal framework of civil aviation, for its operation, Cluj International Airport is certified as fulfilling all technical, operational, safety and security conditions, as well as those relating to the management system. Interventions brought to the significant elements underlying the certification of an aerodrome require the approval of the competent authority in the state.

 

About the performance of Cluj “Avram Iancu” International Airport

At present, Cluj “Avram Iancu” International Airport ranks second among the airports in Romania in terms of passenger traffic.

If in 1996 only one airline operated at the airport, now, no less than 10 airlines provide regular passenger and cargo flights. Thus, at present, the Airport has 45 regular destinations in its portfolio, ensuring openness to Europe and the world.

Through an integrated effort of both management and all staff operating at the airport, passenger air traffic will reach almost 3 million in 2017, compared to 2016, when 1.8 million passengers were registered.

The air transport market is a very competitive one, where airports compete not only for attracting airline operators but also through the commercial and business model approach of the management system. Therefore, it is necessary to build a model of corporate governance at the Airport, compatible with its current performance and driven by the highly dynamic business environment in which it operates.

Interference in a performing management system, under the pretext of applying legal norms through interpretations outside the framework set by the legislator or uncorrelated to market requirements, entails the possibility of losing market position to competitors, unjustified tensions in commercial relations mainly with air carriers and the recording of negative economic performance. Thus, all these will produce effects, contrary to those intended in the GEO no. 109/2011 regarding the performance, respectively the loss of jobs, new expenditures to the state budget, etc.