TAP ‘could need €3.7 billion by 2024’, reveals minister

With the government’s restructuring plan for TAP now formally presented to parliament, infrastructures minister Pedro Nuno Santos has admitted that the ‘global’ cost of bailing out the country’s flagship airline could reach €3.7 billion by 2024.

As the situation stands, the airline is being downsized dramatically (click here) and has received a State loan approved by Brussels of €1.2 billion.

Thousands of jobs will be shed on the basis that within the next few years the airline will be able balance its books and start the arduous task of actually paying back the loans.

Pedro Nuno Santos answered critics who questioned why the government hasn’t let the airline collapse altogether. He said this possibility ‘had been studied’, but would have led to all kinds of ‘unpredictable costs’ that could have been even higher than amounts the government is set to pay out, particularly if it meant ‘losing slots’ at airports and having to renegotiate them.

The masterplan now – beyond the shedding of pilots, cabin, ground staff and planes – is to sell the maintenance and engineering side of the business in Brazil (no takers yet) and maintain the Portugália subsidiary, actually doubling this regional airline’s fleet.

Stressed Pedro Nuno Santos, calculations suggest TAP is set to lose €6.7 billion in revenue by 2025 (due to all the changes caused by the pandemic). In other words, there is no alternative but to “respond to the situation”.

“We are doing all we can to make the company sustainable”, he said – giving examples of cuts being made in other airlines around the world: Lufthansa, for example, which is cutting its fleet by 20% and pilot salaries by 40%; SAS which is reducing its workforce by almost half (48%).
Says Observador, this was “a message for TAP syndicates”.

Brussels took receipt of the government’s restructuring plan last night (Thursday). Pedro Nuno Santos has admitted this was not what he was hoping for. He had hoped parliament could vote on it first, but this was “vetoed” by the prime minister who insisted the decision was a ‘matter for the government’. “It is the government that governs in Portugal”, said Mr Costa.

natasha.donn@algarveresident.com