Recovery will be “very slow” says TAP boss

TAP operations data to September reveals that the recovery in passenger numbers and flights for the Portuguese carrier will be “very slow” according to the airline’s new CEO, Ramiro Sequeira, who is worried about demand for the next six months.

“Within a context of great uncertainty, and the recovery will be very slow and TAP like other airlines will have to follow a path of restructuring in order to guarantee viability,” said the CEO of the airline which is now controlled by the State, in a message to TAP staff and which includes operational data to September.
The data leaves not a shadow of doubt on the impact of the pandemic on the Portuguese national carrier.
TAP reduced its available seat capacity per kilometre (AKS) by 72% in September 2020 compared to September 2019. The airline slashed its number of flights by 68% compared to same period. The average load factor for TAP flights undertaken between May and July, after a period of almost total stoppage was 60%, 20 percent points below the overall average rate seen in 2019, despite a reduction in flights.
Despite most countries opening their borders and lifting restrictions in the movement of people after the first wave of the pandemic, the aviation sector will continue under pressure in the coming years. Travel association IATA predicts that world traffic will recover to 2019 numbers only by 2024.
In the case of TAP in particular, looking forward to the winter months, demand behaviour looks worrying according to Ramiro Sequeira. Current demand is now below the summer months when the air corridors were in operation and bookings are being made well less in advance, generally for the following month.
“We will have to continue to adapt our flight schedule planning to meet the new market situation. This will be the rule rather than the exception except for the Christmas and New Year holiday period for which we will sale up to meet the slight increase in expected demand,” says Ramiro Sequeira.
TAP is currently going through restructuring after the State rescued the airline with a €1,2Bn bailout this year.
The Portuguese Government predicts a further €500 million State aid for the struggling airline next year. Around 1,600 staff are expected to leave by the end of the year. Details about the restructuring plan which is currently be worked upon, have yet to be released. The national airline operator recorded losses of €582 million in the first half of 2020.