TAP plane
José Gomes Ferreira on SIC saying "all this needs to be fully explained..."

TAP “did business with itself … which is prohibited”

Financial expert explains the ‘mystery’ of the 53 ultra expensive Airbus 330s…

The plot thickens: following on from “suspicions” that Portugal’s flagship airline TAP paid 20% over the odds in a leasing deal for 53 Airbus planes (not all of which have yet been delivered), it now transpires this was a ‘deal done with full knowledge of the government of the time’.

As Expresso has put it in a comment piece this weekend, there are so many skeletons in TAP’s cupboard, that some will never see the light of day.

But this one seems to be being dragged into the media spotlight, relentlessly – some would say in a bid to deflect the current bad press affecting the way PS Socialists have been handling this dossier.

This is because the ‘Airbus deal’ goes way back to 2015 when the PSD government of Passos Coelho was desperate to sell TAP to the Atlantic Gateway Consortium – headed up by Brazilian/ American airline boss David Neeleman – but the consortium a) didn’t quite have the ready cash (at least this is the way the story is being told…) and b) wanted to renegotiate a contract for 12 new planes, upping the number to 53.

According to ECO online, “straight after Atlantic Gateway was selected for the privatisation and 61% of TAP in June 2015, David Neeleman signed a memorandum of understanding with Airbus. 

According to a legal analysis by Serra Lopes, Cortes Martins & Associados (SLCM) to which ECO has had access, the airplane manufacturer advanced €226.75 million to a company held by the businessman who later passed the money to Atlantic Gateway.

The money was later used by Atlantic Gateway for the injection of capital that guaranteed the privatisation”, and then TAP signed the much more expensive deal to purchase 53 new Airbus planes.

The arrangement effectively damaged TAP to the tune of 444 million dollars, says ECO.

On Saturday, Correio da Manhã carried a similar story, but managed to conclude that David Neeleman made €51 million from his years at the head of TAP: he entered the company with an investment of €5 and sold his  22.5% share position to PS Socialists five years later – when the company was in a parlous state – for €55.95 million.

SIC’s political and financial commentator José Gomes Ferreira stresses everything that took place with Airbus was ‘wrong’: it boils down to TAP “doing business with itself, which is prohibited…”

“The money that was advanced by Airbus, ended up being repaid because these (53) planes were contracted out at a value that was 20% above the normal price”, Gomes Ferreira continued – all of which is a contravention of the commercial companies code (which says quite clearly that no company can lend funds to third parties who are going to purchase part of its share capital).

So, where to now? The government is keen to sell TAP; TAP has cost the nation’s taxpayers €3.2 BILLION and political fallout over just about everything at TAP has been filling the newspapers here for years.

According to Gomes Ferreira, all this has to be fully ‘explained’; starting with the long-term CEO Fernando Pinto (who left as Atlantic Gateway came onto the scene); the politicians of the time, and David Neeleman himself – the question being “who paid for these damages?” And the answer almost certainly being “taxpayers… us, through the restructuring plan…”

“This dossier involves governments prior to António Costa” insists Gomes Ferreira. “The government of Passos Coelho before 2015, and then the PSD government that lasted all of 15 days but which took decisions (regarding TAP’s future)” before PS Socialists seized power with a left-wing alliance.

“Why is this coming to the surface now”, the political pundit queried: “I can answer that with full clarity, it is because this current government wants to throw a series of realities into the public space to ensure people query what the government of Pedro Passos Coelho did up to its limits”.

PS Socialists have already intimated that they will want to question former PSD political leaders about this ‘deal’. But in José Gomes Ferreira’s opinion this latest ‘scandal’ will just prompt people outside Portugal to look in and say “what kind of country is this that a flagship airline finds a way of borrowing money to buy its own share capital, leaving a financial hole in the company

“All this leads to questions”, he said. “If the public prosecutors office takes this to its end (we’re talking potentially of ) abuse of confidence in company management… these are all issues that lead to questions over this country in its business dealings, national and international… with heavy consequences to the taxpayer”.

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