TAP in scale down restructuring

Portugal’s national airline TAP is to undergo the biggest restructuring in recent years with a cut in aircraft, flights and staff.

The downsizing is part of a restructuring plan ordered by Brussels in return for authorising the Portuguese Government to lend the airline €1.2Bn of public money.
The restructuring plan must be presented to Brussels within six months, but must also be agreed by private shareholders which own over 40% of the airline.
In return for the loan from public funds, the State is demanding a greater say in how the airline will be run going forward.
According to the weekend newspaper Expresso, the private shareholders who comprise the Gateway Consortium should give the thumbs up to the plan by this week. The alternative is bankruptcy and the State having to decide to let the airline fall or fully nationalise it.
In 2019 TAP saw record passenger numbers with 17 million flying compared to 9.1 million passengers in 2011.
According to the newspaper, the State will forfeit a representative on TAP’s executive commission but in return will beef up its power on the board of directors on which until now it had been able to decide almost nothing.
The board has 12 members of which six will be chosen by the State which will now be able to take decisions on the way the company is run and its strategy for the future.
These State powers will include decisions investments, the purchase of flying stock, routes and performance bonuses.