Troubled TAP in privatisation plan

Portugal’s national carrier TAP could be privatised within a year, according to options laid out in a recovery plan.

The stricken government-owned airline, which clocked up 247 million euros worth of debts by the first half of this year, could be declared bankrupt and then restarted as a new company or could even be restructured and then sold on to a private airline.

The recovery plan, which has just been concluded, is to be handed to the government, the only shareholder, in the next few weeks.

The plan was developed by an Economic-Financial Recovery Steering Group headed by Carlos Anjos with consultants to find a solution to Transportadora Aérea Portuguesa’s loss-making European routes, unable to compete against cheaper and leaner low-cost airlines like easyJet and Ryanair.

Among the various scenarios on the table is a capital increase by issuing shares, selling government shares and even wholesale privatisation.

With the creation of the Recovery Group, TAP top brass hope to balance the company’s accounts, having lost 65 million euros between January and July, which even so was up 59.3 per cent in terms of receipts on 2008.

However, the ambitious recovery plan may not be sufficient to generate the eight million euros profits per year that CEO Fernando Pinto says are necessary to keep the fleet in the air and invest in new planes, products and new routes.

A strike by TAP pilots recently, who earn on average 8,500 euros a month, over long working hours, which they say are putting lives at danger and pay (they want a 1,000 euros pay raise) lost the company 10 million euros and further strikes are expected between now and Christmas.

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