José Gomes Ferreira talking last night on SIC's Jornal da Noite

TAP gets (conditional) approval for €2.55 billion ‘restructuring plan’

Portugal’s ‘flagship’ airline TAP has received the green-light it needed to come back from the brink – but not without significant conditions.

The European Commission’s approval for the government’s €2.55 billion restructuring package came in at almost the 11th hour.

Earlier this week infrastructure minister Pedro Nuno Santos admitted that without this go-ahead, the airline would be forced to close.

He also said there was no possibility of TAP become a ‘Tapezinha’ (a smaller operation entirely) – which pundits refute.

The facts speak for themselves, journalist José Gomes Ferreira, a specialist in financial matters and the economy, told SIC yesterday.

Part of the conditions include TAP relinquishing 18 daily ‘slots’ (authorisations for landings and departures), which will now go to other airlines.

“The idea that there wouldn’t be pain or further dismissals is untrue”, Gomes Ferreira stressed. The ceding of slots will see the airline losing more than 6,000 flights per year – and becoming every bit the ‘Tapezinha’ that he believes it should be.

Put simply, Brussels has done what no Portuguese government “has had the courage to do throughout decades”: TAP will now have to undergo:

  • a profound restructuring; 
  • get rid of what Gomes Ferreira describes as the ‘cancer’ in the group – the loss-making maintenance centre operating out of Brazil 
  • get rid of (or put another way, disengage from) Groundforce, the airline’s baggage handling company and 
  • Dispense with the catering arm of the group, Cateringport.

All the above will result in dismissals, he warned.

Beyond these conditions, the group actually has TWO airline companies: TAP and Portugália (which competes with low-cost airlines throughout Europe). These now will have to be separated, ‘restructured’ – slimmed-down in other words – “which will incur problems”, said the journalist.

And at the end of the line, TAP will be a much smaller airline, and thus the ‘Tapezinha’ label the government has been at pains to reject will be more than apt.

Another salient point is to remember that TAP’s latest woes will have cost the Portuguese taxpayer well over €3 billion in recent years (bearing in mind financial support given through the pandemic).

The bill is along the lines of the one the taxpayer footed to support Novo Banco rise from the ashes of BES, in that no-one really knows where it will end.

One good aspect, admits Gomes Ferreira, is that the airline will continue its links with ‘Portuguese speaking countries’ and will ensure that Lisbon remains an important ‘hub’ for international flights.

The bad is that there is still so much work to be done on satisfying Brussels’ demands – and ‘ambitious’ routes brought in to justify previous investment “will all have to go”.

Today, the government may try to finesse the situation with “propaganda”, saying this is exactly what it wanted, “but after Christmas the discussions will begin” in parliament and beyond “on all the negative aspects” of the deal, he predicted.

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