The airline underwent restructuring, received billions from the State and, at the end of 2022, returned to profit; privatization must be approved
The Portuguese government is expected to approve this Thursday (September 28, 2023) the decree that establishes the rules for the privatization of the airline TAP. The decision will be taken at a meeting of the Council of Ministers.
On September 19, Prime Minister António Costa admitted the possibility of privatizing 100% of the company’s capital. The amount, however, will depend on the chosen partner and several scenarios are under discussion.
“We will only privatize, sell part or all of the capital, taking into account the defense of the interests of the company, Portugal and the Portuguese”, said Costa in a speech in Parliament.
Questioned by journalists, the President of the Republic, Marcelo Rebelo de Sousa, said he was not opposed to privatization: “If economically, from a Portuguese point of view, it is the best solution, [então] is the best solution”.
Regarding the terms of the sale, he defended state monitoring and control. “Any State is careful to guarantee minimum monitoring and control conditions. Is it compatible with full privatization? May or may not. We will see the conditions“, he spoke.
Privatization is also defended by TAP’s executive president, Luís Rodrigues. “I think it will go well. I am a great supporter of privatization, there is no doubt about that”, said the executive at a sector event held in Lisbon. “Governments are not designed to manage companies in highly competitive environments”, he added.
On the other hand, opposition politicians are against privatization. The coordinator of the Bloco de Esquerda, deputy Mariana Mortágua, criticized the sale of the airline at a time when it returned to making a profit, after receiving large investments from the State.
“Taxpayers paid for TAP’s salvation, TAP workers paid for TAP’s salvation, with their salaries, with their sacrifices. TAP is making profits. What is the reason for handing over these profits to a private investor?”, he questioned.
In 2021, the government approved a restructuring plan for the company, which received support of €3.2 billion. TAP had been in the red for 5 years and returned to profit at the end of last year, with revenue of €65.6 million. In the 1st half of 2023, the company recorded a profit of €22.9 million. Here’s the full report (PDF – 180 kB).
Some companies have already shown interest in acquiring TAP. Among them is the holding IAG (International Airlines Group), result of the merger between British Airways and the Iberia.
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