Debt-ridden TAP reaches deal with Airbus to delay delivery of 15 new planes

Debt-ridden airline TAP – which has just announced yet further multi-million euro losses – is reported to have reached a deal with Airbus to delay delivery of 15 new planes. The idea is to ‘save’ €856 million which would otherwise have to be spent before 2022 – and to give the company a little more ‘breathing space’ to see how the sector ‘recovers’ in the post-pandemic context.

Explain reports, in all, TAP is contracted to purchase 53 new planes from Airbus up to 2025 – and has already received 17 of them. Thus the delay in paying for and receiving 15 is simply a ‘renegotiation process’.

In the meantime the beleaguered company has posted a new set of eye-watering losses for the first half of 2020, boiling down to yet another dip of hundreds of millions (€606 to be exact). This is hot-on-the-heels of perennial multi-million euro losses (click here) and a State recapitalisation package (click here).

Said a note from the company sent to market regulators CMVM: “Covid-19 has caused enormous losses to the economy and the transport industry in particular, with TAP S.A. registering net losses of 582 million euros in the first half of 2020 which represents 96% of the net losses of the TAP group which was 606 million euros”.

Say reports, the airline is still only operating at 30% capacity.

In the first half of this year it carried less than 4.9 million passengers when during the same period of 2019 it had transported 7.9 million.

natasha.donn@algarveresident.com