Government denies knowledge of António Costa government probe into role of Airbus in the privatisation of TAP in 2015

The Portuguese government says it does not know if anything resulted from an investigation from the previous government and the European Union over the role of Airbus in the privatisation of TAP in 2015.

Information about a possible probe had been demanded by Portuguese MPs sitting on a parliamentary inquiry held last year.

“As for the steps that the Government has taken with the European Union to investigate the role of Airbus in the privatisation process, they (the current government) do not know if any steps have been taken on the matter”, said the office of the Prime Minister, Luís Montenegro, in response to the PCP communist party MPs.

In the final report of the parliamentary inquiry commission, approved in July 2023, the MPs asked the then Government of António Costa to launch a probe “as part of its bilateral relations and its role within the structures of the European Union, into the role of Airbus in the TAP privatisation process”.

At issue are the so-called “Airbus funds”, money that the European aircraft manufacturer gave to David Neeleman, the main shareholder in the private consortium Atlantic Gateway, to capitalise TAP as part of the airline’s privatisation at the end of 2015, in exchange for a commitment from the Portuguese airline to buy 53 new aircraft.

Atlantic Gateway (integrated by Global Azulair Projects, SGPS, SA and the DGN Corporation, both of which were controlled by Neeleman and HPGB, SGPS, SA, controlled by Portuguese entrepreneur Humberto Pedrosa) held 650,000 category A shares, representing 45% of TAP’s share capital and voting rights, and 90% of the economic rights of the company at the time.

Airbus had made an agreement with Neeleman to deliver capital credits worth US$226.75 million (€202.5 million) to DGN, David Neeleman’s company, to be channelled to TAP through Atlantic Gateway, created by the Brazilian businessman and Humberto Pedrosa, and which in November 2015 acquired 61% of TAP. The new private shareholder delivered the same $226.75 million (€202.5 million) in supplies to the airline, which in turn agreed to buy the 53 aircraft or pay compensation to the same amount.

However, according to an audit conducted by Portugal’s financial spending watchdog, the Financial Management Institute (IGF), the capitalisation made by Atlantic Gateway could have been illegal under the Commercial Companies Code which prevents a company giving loans or supplying funds to a third party to acquire own capital shares.