TAP airplane

Prosecutor investigating purchase of new planes by former TAP management

Suspicions company paid 20% ‘over the odds’ in leasing deal for 53 Airbus

Portugal’s public prosecutor’s office has opened an investigation into the case of the purchase of TAP aircraft by previous management of the airline, after a complaint lodged late last year by the then minister of infrastructure, Pedro Nuno Santos, and current finance minister, Fernando Medina.

In a response sent to Lusa news agency regarding the alleged suspicions of corruption in the purchase of TAP aircraft by the company’s previous board members, the public prosecutor’s office (PGR) revealed that “the report submitted by the then minister for infrastructure and housing (Pedro Nuno Santos) and by the finance minister (Fernando Medina) led to an enquiry at the central department of investigation and penal action (DCIAP)”.

However, the PGR did not state whether the current investigation at DCIAP – the public prosecutors’ department that investigates the most serious, complex and sophisticated organised crime – already has suspects or defendants, justifying that this inquiry is “under investigation and subject to judicial confidentiality”.

In mid-October last year, the then infrastructure minister revealed that TAP’s board had requested an audit because it suspected it was paying more for aircraft than competitors

The government then forwarded the findings of the audit to the public prosecutor.

“The management (of TAP), at a certain point, suspected that we were paying more for the planes than competitors were paying (…) The board asked for an audit, that audit was concluded, handed to the government and we, faced with doubts over the conclusions of that audit, referred the audit to the public prosecutor’s office,” Pedro Nuno Santos announced at the time during a hearing in parliament.

Media sources put the amount suspected of having been ‘overpaid’ as €320 million. The deal itself came to €1.6 billion – and had to be renegotiated during the early days of the pandemic, as TAP simply did not have the money available.

(Curiously, the delivery of these new Airbus involved another controversy: pilots and passengeres felt sick in them.)

Says Lusa, Pedro Nuno Santos recalled the privatisation of TAP carried out by the PSD/CDS-PP government, partially reversed in 2015, in a deal in which TAP was sold for 10 million euros to “a shareholder who further indebted the company”. It was the private management led by this shareholder, David Neeleman, that took the decision to renew the airline’s fleet of aircraft.

Mr Neeleman stressed in October when this issue came to the surface that “the new TAP planes were acquired at the market price, as various independent evaluations presented, and confirmed by rigorous and exhaustive technical and political scrutiny, have confirmed”.

Source material: Lusa/ Correio da Manhã