Brussels says TAP viable but airline relinquishes 18 slots

The European Commission said this week that Portuguese airline TAP is financially viable in the long term.

The opinion was given by the EC’s Deputy Commissioner, Margrethe Vestager before Brussels gave the green light to the Portuguese government’s injection of up to €536 million into the company. It will get the cash next week.
A decision was taken by the EC on Tuesday to approve TAP’s restructuring plan which will require “remedial measures” such as giving up 18 slots representing 5% of slots at Lisbon’s Humberto Delgado International Airport.
“It has been very encouraging to see the restructuring plans which have been detailed for TAP. I think this company is viable in the long term”, said Margrethe Vestager, quoted by the Lusa news agency.
At a press conference in Brussels, the new directives regarding state financial aid on climate, the environment, and energy, the commissioner had been asked about the TAP restructuring plan and assured that the EC was “working hard now to reach a decision this week”. That decision came yesterday.
“Public support for TAP is quite hard and, so as to not distort competition, TAP has also accepted some commitments”, said Vestager.
On the table at the negotiations was the issue of slots at Lisbon airport, with the Directorate-General of Competition in Brussels demanding that TAP relinquish more prime time slots than had initially been offered by the government.
Of the six original “movements” (equivalent of 12 takeoffs and landings), TAP now had to give up 12, although which ones, when and how this will work in practice has yet to be decided.
Another issue on the table was the increase in TAP’s own contribution towards the restructuring effort, which Brussels thinks should be over 40%.
The Government has wavered its decision that the State should provide a cash cushion of up to €512 million in 2023. Instead is a package worth €250 million to come from private lenders.
The Government handed Brussels a restricting plan for TAP a year ago and has already implemented a rationalisation plan including reducing staff and downsizing the fleet, in addition to wage cuts.
The €536 million is the remaining part of the €998 million agreed to recapitalise the airline and foreseen for 2021. The company has already received €462 million because of Covid-19.