TAP loan “unpayable” in six months

Portuguese airline TAP says it will not be able to repay a State capital loan of up to €1.2Bn which it needs to stay in the air within the six months stipulated by the European Commission.

“The EU Commission requires a maturity of six months and it is obvious that we are not in a position to pay the debt six months from now,” said TAP President Antonoaldo Neves yesterday (Tuesday) at a parliamentary hearing of the Commission for the Economy, Innovation, Public Works and Housing, on the €1.2Bn recapitalisation loan the airline needs to avoid impending bankruptcy.
According to the TAP executive president, “It is important now not to let this six month period pass by,” he said, referring to the period in which TAP must come up with the restructuring plan required by the European Commission.
“It is important to have this plan ready within 60 or 90 days to be presented to the European Commission in three months time” said Neves.
As to the European Commission position regarding offsets that would be requested from TAP in exchange for the State loan, Antonoaldo Neves said, “I am expecting the EC to be extremely tough with TAP”.
“We did not have the opportunity to take part in the discussions and, in our view, the EU Commission could have offered us a different and more attractive path,” he said.
He stressed that the TAP Executive Commission would be “decisive in discussions with the European Commission.
“I am in no doubt that the Executive Commission will discuss and fight for this to the end in order that the EC offers TAP exactly the same as it is offering other airline companies,” he continued. “Discriminating against TAP is not acceptable”.
In the same hearing, Antonoaldo Neves said that the €1.2Bn loan was not the only aid that had been asked from the State by the sector, which also includes a relaxation on airport taxes and different deadlines to pay airline navigation charges, as well as a review of the labour law code.
“All of us have to contribute towards this restructuring plan,” he said.
The statement comes as the Supreme Court of Administration has accepted to study an injunction slapped on the Government by Porto chamber of commerce (Porto Commercial Association) which seeks to block the State cash loan injection of €1.2Bn until a court ruling on a case in which the association is arguing that a restructuring of TAP centred around the Lisbon hub at the detriment of regional airlines is unfair, is decided.