TAP – David Neeleman speaks out

 In Aviation, Companies, News, TAP

The former private shareholder of Portuguese airline TAP, David Neeleman, has hit out against criticisms and veiled accusations about his conduct when he purchased and later sold his share in the carrier.

In an open letter published in the newspaper Observador this week Neeleman spoke of the “political interference and unacceptable political pressure” over the airline he ran through the consortium Atlantic Gateway between 2015 and 2021.
The JetBlue entrepreneur who founded five commercial airlines:  Morris Air, WestJet, JetBlue Airways, Azul Brazilian Airlines, and Breeze Airways, and along with Humberto Pedrosa and Aigle Azur, owned 45% of TAP Air Portugal until his departure, argued that his proposal through Atlantic Gateway to buy TAP “was transparent and explained in detail to (the umbrella holding that holds Portugal’s public companies) Parpública in 2015.”
In an article headlined ‘A lie is still a lie no matter how many times it is told’ Neeleman stressed again that the 2015 purchase was “transparent, despite some members of the PS government saying they knew nothing about the subject in an attempt to whitewash the responsibilities that any responsible and competent government figure knows that they must assume when they take power”. The airline was part privatised under the PSD party government led by Pedro Passos Coelho.
The Brazilian-American airline tycoon also added that Airbus “only helped TAP, accepting the exchange of aircraft orders and giving its financial contribution because it believed in Neeleman and in team.”
Neeleman also questioned why, over seven years, so many ministers, secretaries of State, directors and advisors had “not blocked the capitalisation from the so-called Airbus funds that were parcelled out in tranches throughout 2016”, when the PS government was already in power.
The entrepreneur also argues that his team’s plan had “saved TAP in 2015 and in the years that followed” and said that he would respond to all the questions from MPs at the TAP Inquiry Commission.
He also said he would clear up questions such as “errors (allegedly) committed” in the negotiations with the European Union or the “unacceptable political interference and pressure over TAP’s executive commission during our management.”

Parliament to have access to invoices

At the parliamentary hearing on Thursday approval was agreed that both TAP and the Ministry of Finances should hand over all the documents, invoices, and correspondence sent by David Neeleman and his companies, including DGN and Atlantic Gateway, regarding services given to David Neeleman and his companies as well as all the payments made by TAP to outside consultants or other entities to do with the acquisition of TAP and the negotiation of contracts with Airbus since 2014 to date.

Pedro Nuno Santos the minister of Housing and Infrastructure until his resignation over the TAP affair involving the €500 million compensation package paid to an ex-director at the airline which is now one aspect of the alleged mismanagement being investigated by the committee, has recognised that the contract signed by the government with David Neeleman stipulated a €55 million contract payout in return for his abandoning his role as shareholder at the airline which was renationalised against the airline mogul’s advice and will.
He also said that an audit made by the airline on the plane leasing deal with Airbus had concluded that TAP paid a lot more than competitors for the 53 new aircraft and that Airbus had paid (either directly or indirectly) for the company’s capitalisation.
The ‘Airbus funds’ has been one of the hot potato issues which the committee has most focused upon throughout the inquiry over the allegation that David Neeleman may have used funds paid by Airbus to the airline via one of his companies to capitalise his private share of the airline.
“I have to believe the audit requested by TAP. TAP did not request it because it was told to by the government; it did so because it concluded that it was paying more than the competitors for the aircraft,” he said.
Atlantic Gateway owned by David Neeleman and Humberto Pedrosa purchased a 61% share in TAP in 2015 with a commitment to capitalise the airline with US$226.75 million.
That money, it has been alleged, was transferred to David Neeleman by Airbus in return for cancelling an contract to lease 12 A350 aircraft and instead lease 53 state-of-the-art A320 and A330 aircraft.
In other words by upping the contract he may have got a similar amount from Airbus to the capital he was expected to inject into TAP which he may then have used to pay to capitalise the airline at the State’s cost rather than from his own pocket. Neeleman denies this.
But David Neeleman argues: “It is very convenient to demonise the overseas investor and send out the message that the American private investor – who turned the company around from a €512 million loss to a €1Bn profit without one euro of public investment – is guilty of prejudicial mismanagement at TAP”.