According to Luís Rodrigues, the ticket is “only on promotion”; he states that there is greater demand and a problem “in the availability of planes”
Luís Rodrigues, CEO of TAP, said that the era of cheap air tickets has come to an end. According to him, after the pandemic, the sector is experiencing greater demand and restricted supply, resulting in higher prices.
“When we look ahead, at reserves, we do not see a crisis. We see strong sustainable demand. What we see are problems in the availability of planes. Manufacturers are unable to deliver more aircraft. We have a structural problem, with high demand and weak supply, which means the price inevitably rises.”, he stated in an interview with the newspaper The globe published this Thursday (8.Feb.2024). “The only way for passengers to deal with this is to plan their trip as early as possible.”, he added.
Rodrigues said it was possible “lower ticket prices administratively”, but that the action represents a “bad start”. He stated: “When you don't let the market work, things go wrong”.
And he added: “Humanity as a whole increases. There will be more people to fly. People have more appetite for tourism. Companies also face the challenge of sustainability, of achieving zero carbon emissions. I would say that cheap air tickets are only on sale”.
TAP's future is on hold until Portugal elects a new government in the March 10 elections. The new management may choose to privatize the company or sell part of its capital to the private sector. The company was renationalized on an emergency basis in 2020. The measure enabled the contribution of public money as a way to mitigate the effects of the pandemic.
According to Rodrigues, the topic should not be discussed this year. “The elections are in March. Then comes the negotiation of the 2025 budget and no one will have the head or time to think about it. In 2025, privatization may begin. But it is necessary to have authorization from the European Commission, Brazilian and North American authorities. This takes another year”, he declared.
“TAP's greatest asset is access to the Brazilian market. Brazil represents 1/3 of the operation. No one would buy the company to jeopardize access to the Brazilian market. It would kill the goose that lays the golden eggs”, he added.
Rodrigues stated that Brazil is TAP's fastest-expanding market. “If Brazil realizes the enormous potential for tourism, it will only grow“, he said. “In Portugal, tourism accounts for 19% of GDP [Produto Interno Bruto]. Here, it is 7% or 8%. Does not make sense”, he added.
The executive mentioned that Iberia, Air France KLM and Lufthansa showed interest in TAP and that, “because of the control rules”, the buyer must be mostly European. “But there may be Brazilian, North American or Arab participation, as long as the buyer is controlled by Europe.“, he said.
According to him, the State maintaining a stake makes sense “given the strategic importance of the company”. However, Rodrigues said that TAP cannot be treated as a public company.
“Today it is a public company subject to public company rules. TAP needs to fulfill the same obligations as Teatro São Carlos or Companhia das Águas. This doesn't make sense because TAP is the only one that operates in the global market”, he declared.
“For each purchase over €5 million, authorization must be requested from the Court of Auditors. And we have this value every day. I have to maintain a team and structure to deal with this bureaucracy. These are unnecessary costs”, he concluded.
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