With flag-ship airline TAP in dire financial straits, infrastructures minister Pedro Nuno Santos reveals the government is preparing a large scale intervention, which will radically alter the shareholding structure.
Says Público, he has vowed the government “will save TAP in the public interest” as the company “cannot survive without public intervention”.
But the consequences for shareholders Atlantic Gateway (the consortium led by Brazilian airline mogul David Neeleman) look likely to be fairly devastating.
Said Mr Santos today: “The State is studying different alternatives for intervention to assure not only that TAP doesn’t collapse, but that it has conditions to serve the public interest and our economy. I repeat, to serve the interests of the State and not the interests of any particular shareholder”.
Earlier this month, prime minister António Costa admitted in interview with Reuters on the economic effects of the coronavirus pandemic that the government “cannot exclude the need to nationalise TAP or other companies that are absolutely essential for the country. We cannot risk to lose them”.
The pandemic has seen TAP ground almost all its flights and lay-off 90% of its workforce.
The airline was already in serious financial trouble before the Covid crisis, but there were possibilities of ‘investors’ on the horizon.
Now, in the words of aviation online Simpleflying, “it is unlikely that any investments will be made. Hence, nationalization might be TAP’s only realistic solution”.
Portuguese weekly Expresso (which runs daily online stories) doubts the intervention will get to full-blown nationalisation, basically because of what is going on elsewhere in Europe.
In France and Holland, for example, the governments have agreed to ‘bailout’ their national airlines (Air France and KLM) by guaranteeing hefty bank loans.
Expresso suggests the Portuguese government will come up with a similar solution, bringing new conditions into the business ‘arrangement’ with Atlantic Gateway that will involve far greater ‘control’ of future management decisions.
Updates to come.