TAP closes 2022 with a profit

Portugal’s national airline TAP will close 2022 with a profit for the first time since 2017 according to CNN and ECO online news.

The good news for the airline, which has suffered nothing but bad news for years, comes after two years of losses of over €1.2Bn.
Earlier this year the Portuguese government was given the green light by Brussels to inject a €3Bn package to keep the airline afloat in terms of cashflow and pay for a major re-structuring programme to make the carrier sustainable and prepare it for an eventual privatisation in which several larger carriers such as KLM and Lufthansa are said to be interested parties.
The airline’s administration headed by Christine Ourmières-Widener said the profit was in part due to the recovery in Portugal’s tourism industry to pre-pandemic levels with over 10 million passengers carried over in the first nine months of the year, and operational revenues of €2.44Bn – the equivalent of 98% of revenues posted for the like-for-like period in 2019.
Between January and September, TAP clocked up losses of €91 million, an improvement by €20 million on the same period in 2019. But in June 2022 the company’s net results stood at €202 million, 60% down on the results for the first six months of the year.
TAP’s restructuring plan has involved intense cost cutting including salary cuts and redundancies. Between 2019 and 2021 around 2,000 staff were paid off to leave the company through early retirement and voluntary contract termination packages (around one-quarter of the total workforce).
In the first six months of 2022 alone the airline had cut its overall salaries bill by 7.2% from €202 million to €187 million, yet still took on 131 new staff members.
The main task facing TAP CFO Gonçalo Pires is to pay out investors around €200 million held in TAP bonds which were issued in 2019 and mature on 23 June, 2023.
In 2024 TAP will have to pay investors some €375 million as a result of another bond issue made in November 2019.
Overall in 2020 and 2021 TAP registered record losses of €1.2Bn respectively.