By CHRIS GRAEME [email protected]
Troubled national carrier TAP ended 2009 3.5 million euros in the red because of maintenance and handling costs.
The state-run airline, which is to be privatised by 2012 when its current chairman Brazilian Fernando Pinto steps down, would have made a modest profit had it not been for huge Groundforce costs.
The TAP group recovered from massive 285 million euro losses registered in 2008, but its 3.5 million euro loss today represents 60 per cent of the company’s business volume, while its own capital continues 200 million euros in the red.
In an interview with business dailies last week, Fernando Pinto said that part or complete TAP privatisation had been on the table since 1994.
The chairman, who has been at TAP for 10 years, said the company needed capitalisation but that he was in favour of a purely financial investor getting on board rather than forming an alliance with a rival carrier.
However, he admitted that there were several reasons why investors might be scared away from injecting cash into TAP.
One of the main reasons was that its handling and maintenance business continued to show losses.
Whereas TAP SA enjoyed high profits in 2009, TAP SGPS suffered the negative influences of Groundforce which had “significant losses” of 29.6 million euros.
“When I arrived, the company didn’t have capital and our financial situation showed that if the company wasn’t privatised within six months, it would go under,” he told Público on April 7.
“Today, TAP is run basically like a private business with no direct influences from the government imposing internal changes,” he said, adding that TAP now looked to make profits just like any other private company.
However, he admitted that TAP needed capitalisation for future growth and stability, and said that the company had succeeded in turning around its fortunes from one of the worst years on record in 2008.
He said that the company was looking for large international financial investment groups to develop the company’s potential, preferably ones that already had experience in the transport sector and links with Portuguese speaking countries.
Fernando Pinto did say that an alliance with another airline could have advantages and disadvantages. On the one hand, it could increase synergies and business volume, on the other it could put Lisbon’s position as a hub for air traffic from Brazil to Africa and Europe, at risk.
He also said that had it not been for 30 million euros worth of negative impact from Groundforce, TAP would have enjoyed one of its best years ever in 2008.
TAP Air Portugal pilots called off a five-day strike shortly before Easter after agreements were reached over wages and bonuses after the pilots claimed that they weren’t getting their fair share of 21 million Euros in profits generated by the airline.
“We arrived at an agreement and the threat of strike action receded. There could be fresh developments for other reasons but I have high hopes this won’t happen. If we have another strike then we’ll lose resources that later cannot be turned into benefits for the staff,” he warned.