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Portugal's airline TAP says on course for goals, should attract investors

·2-min read
The logo of TAP Air Portugal Airlines is pictured on an A330 Airbus plane in Colomiers near Toulouse

By Sergio Goncalves

LISBON (Reuters) - Portugal's ailing flag carrier TAP is delivering on its restructuring goals despite global uncertainties, which makes it all the more attractive to a potential international partner who could reinforce its resilience, its chief executive said on Thursday.

The 72.5% state-owned airline also boasts "one of the most modern European fleets, and unique market destinations" in Brazil and Africa, Christine Ourmieres-Widener told reporters.

"TAP is definitely quite an attractive airline for any group in a consolidation process. To be part of a big (international) group would be a source of resilience for TAP," she said, adding that a strong partner would ideally bolster TAP's market share in key markets such as the United States.

She said it was up to the government to decide whether and when to reprivatise TAP, declining to estimate when that could happen.

Brussels approved in December a 3.2-billion euro ($3.14 billion) rescue plan for TAP, but imposed a tough restructuring that included downsizing its fleet, cutting more than 2,900 jobs and reducing wages of most workers by up to 25%.

TAP has to achieve positive operating results in 2023 and a net profit in 2025, recouping from a record loss of 1.6 billion euros in 2021.

Ourmieres-Widener said that TAP was already showing "a very significant improvement in the operating profit" and aimed to improve such parameters as amortization, depreciation, interest and debt.

TAP's first-half loss more than halved from a year ago to 202 million euros as passenger revenue jumped nearly five-fold and it is flying at 90% of 2019 capacity, after two years of repressed global travel due to the COVID-19 pandemic.

Despite the surge in jet fuel prices that could nearly double to 1 billion euros at TAP this year after Russia's invasion of Ukraine and the prospect of a global economic slowdown or a recession, she said that bookings of the third quarter and for the fourth quarter were "very strong".

($1 = 1.0185 euros)

(Reporting by Sergio Goncalves; editing by Jonathan Oatis)