Ex-Infrastructure minister contradicts Prime Minister over TAP
Portugal’s former Minister of Infrastructure and Housing, Pedro Nuno Santos stood up in parliament on Monday and told the Prime Minister António Costa that the bottom line for the privatisation of State-owned airline TAP had to be the sale price.
António Costa had said that TAP would only be sold on four key conditions, two of which was to safeguard the interests of the State and maintain Lisbon as a hub for the company which has attracted the interest of a number of multinational airline groups including IAG, Air France-KLM and Lufthansa.
The Prime Minister had said the sale price was the “least important consideration”, which was swiftly attacked by opponents in parliament given that the airline was been valued at around €2.8Bn, yet the taxpayer had forked out €3.2Bn to keep it from bankruptcy in 2022.
Nuno Santos also said that the Portuguese President Marcelo Rebelo de Sousa should have insisted that the government clarify questions over the privatisation of TAP as part of the “normal relationship” between the prime minster’s and president’s offices before the president vetoed the decree-law, offering detractors another chance to point out yet another example of the tense relationship between the Head of State and the Prime Minister.
The President rejected the government’s decree setting out the conditions for reprivatising TAP, citing three “critical issues” that require clarification.
These were: the State’s role in the sale of the airline and its power to monitor and intervene in a strategic company like TAP if more than 51% of the airline is sold.
Marcelo Rebelo de Sousa also wants clarification as to whether the decree-law allows TAP to sell of acquire any type of asset, without any further precision or criteria, which goes far beyond the planned integration of Portugália into TAP SA.
Finally, the President says that the decree-law does not ensure total transparency in the contacts phase prior to the drawing up of tender specifications and regulations governing the sale and choice of eventual buyer. This means making sure that these will not be binding negotiations and that there will be a record of these contacts.
Without referring directly to António Costa he also argued that the question of Lisbon’s remaining TAP’s hub airport was a “false question” and that it wasn’t doing the airline any favours in terms of its value by saying that the “sale price was the last criteria” on the criteria listed by the government for the conditions of sale.
Later on TV, Pedro Nuno Santos highlighted that in the first nine months of 2023 TAP had posted record profits, something that the airline had not seen in its (modern) history.
TAP made a profit of €22.9 million in H1 of 2023, an improvement of €225 million in relation to the same period in 2021 when it made a loss of €202.1 million.
The profit marked the Star Alliance carrier’s first positive net result since 2017 and also contrasts with a loss of €1.6Bn in 2021.
Nuno Santos said: “we don’t need to ask the question about retaining Lisbon as a hub or not when Lufthansa or KLM-Air France would buy TAP precisely because of the hub and no other reason”.
However, fears that a bid from the IAG Group, which has Iberia and British Airways, could result In Madrid being the airline’s hub, provoked the government to making the retention of Lisbon as a hub as a precondition of sale for reasons of national interest.