TAP lays off 90% of workforce

 In News

Portugal’s national carrier took the decision to lay off 90% of its workforce for at least the next 30 days.

The measure, which may or may not be renewed depending on the situation regarding the State of Emergency’ came into effect this week.
It means laying off just over 9000 staff of which 90% will be completely laid off while 10% will have reduced working hours by 20%.
Salaries under the terms of the layoff regime will be part-paid by the State, with expected payments of two-thirds of staff salaries in the case of total layoff. There will also be a minimum and maximum limit with the latter set at €1,905.
TAP said this week that it would pay two-thirds of the fixed monthly salaries of each worker, exceeding the benchmark amount of €1,905 in some cases. The maximum participation from the State, however, will remain at the amount set by law of €1,333.5
It was also announced this week that the airline which published huge financial losses in both 2018 and 2019 may be nationalised.
The Minister for the Economy, Pedro Siza Vieira admitted, “We’re ready to nationalise if necessary”.
TAP’s operations, which used to run over 3000 flights a week, were down to just five this week: three from the Azores and two from Madeira.
Interviewed by TSF radio on Tuesday, Pedro Siza Vieira admitted that the government “will not fail to use all of the powers at its disposal to safeguard TAP’s strategic position”. What this means, he explained further, was that the “State has the tools to nationalise and will use them if it sees fit.”
For TAP the pandemic has simply “aggravated a long financial crisis. The airline is a company “with highs and lows that returned to State hands under the Government of António Costa after privatisation in 2015. In 2017 the State returned to an ownership of 50% State capital, with Atlantic Gateway responsible for 45% and the rest of the company shares held by employees.
Recently it was reported in the Portuguese press that TAP was seeking new shareholders in the form of Lufthansa and possibly United Airlines, both of which, in line with all other airlines, are in considerable trouble.
Baggage handling company Groundforce Portugal also decided to lay-off over 2,400 workers while 69 with administrative functions will see their working hours reduce while executives have proposed a 30% reduction in salaries.
In a communiqué, Groundforce said that since it had been “strongly affected by the grounding of almost the entire TAP fleet and an abrupt fall seen in all the areas in which it operates” it had decided on the lay-offs and would present the adopted measures to unions on Wednesday.