Neeleman looking to sell his capital share in TAP

The entrepreneur David Neeleman is negotiating with other airline companies to sell his position in the consortium Atlantic Gateway which owns 45% of TAP.

The operation could take place as early as the first quarter of 2020 and involves changes to the shareholding structure, including David Neeleman’s exit from the company as a capital shareholder.
The news was reported in Jornal de Negócios, which did not reveal how it came by the information, but in September the online business daily Eco Online reported that it was the Government’s intention to remove David Neeleman from TAP because of the airline company’s poor results with €120 million losses in the first half of 2019.
David Neeleman is a TAP shareholder via the consortium Atlantic Gateway which he controls in partnership with Humberto Pedrosa. Together they have a 45% share of TAP. But their relationship with the State shareholder has soured partly because of the successive negative results presented by the company.
Against this backdrop, Neeleman is said to have made contacts with other airline companies to buy his share in TAP, including Lufthansa, British Airways, Air France and United. The Government has been accompanying these conversations.
The new will come as no surprise given Neeleman’s strategy in other airline companies such as Westjet in Canada, JetBlue in the US and Azul in Brazil. Neeleman’s position in TAP was therefore always seen as a set-term prospect.
The agreement made with the Government in 2016 presupposed that Atlantic Gateway would not be allowed to sell its position in TAP for five years. But the sale that is being prepared by Neeleman does not undermine this obligation since if it goes ahead, the entrepreneur will sell his position in the actual consortium. In other words Atlantic Gateway will remain a shareholder.
TAP’s overall results worsened in the first half of 2019 by €26.4 million on the same period on 2018, bringing the negative liquid result to €26.4 million. The increase in losses was explained by the airline on a fall in revenues from Brazil and an increase in staff costs as a result of new contracts and pay packet reviews negotiated in 2018.