Asked how much more the Portuguese government expects to spend on TAP this year, Joao Leao told Sunday’s Jornal de Negocios: “That is still being analysed,” Reuters reported. “The situation of TAP is very demanding ... that amount may have to be reconsidered because at the moment the pandemic is having a much stronger impact than expected,” Leao said. In December, a government plan to rescue TAP proposed 2,000 job cuts by 2022 and pay cuts of up to 25%, while the airline would need around 2 billion euros in extra funds with state guarantees to cover its financing needs until 2024.
Portugal is confident the European Commission will approve its plan to rescue ailing flag carrier TAP, Finance Minister Joao Leao said in an interview, adding that he expected that green light by the end of March, Reuters reported. The government unveiled its overhaul plan last month, proposing 2,000 job cuts by 2022 and pay cuts of up to 25%, while saying the airline would need around 2 billion euros ($2.46 billion) in extra funds with state guarantees to cover financing needs until 2024.
Portugal expects airline TAP will need around 2 billion euros ($2.4 billion) in extra funds with state guarantees to cover its financing needs until 2024 under a restructuring plan, Reuters reported. Flag carrier TAP asked for state aid in April after suspending almost all of its 2,500 weekly flights at the height of the coronavirus crisis, which hit airlines globally. The overhaul plan, which needs European Commission approval, was submitted on Thursday and envisages TAP would need to cut around 2,000 jobs by 2022 and introduce pay cuts of up to 25%.
The Portuguese government’s draft restructuring plan for ailing flag carrier TAP projects it may need around 2 billion euros of additional state aid by 2024, while thousands of jobs will be terminated to turn the airline around, three sources said, Reuters reported. One of the sources familiar with the document told Reuters it envisaged that TAP, which had a loss of 701 million euros in the first nine months of 2020 as the coronavirus pandemic slashed its passenger numbers by 70%, should break even in 2025. The plan still needs to be approved by the European Commission.
A restructuring plan for Portugal’s flag carrier TAP will be sent to the European Commission in November, the secretary of state for the treasury said on Tuesday, which if approved will buy the airline time to repay a huge bailout loan, Reuters reported. TAP asked for state aid in April after the outbreak of the coronavirus forced it to suspend almost all of its 2,500 weekly flights. The European Commission approved a 1.2 billion euro rescue loan in June, contingent on the airline drawing up a restructuring plan within six months, or by the middle of December.
Portugal’s decision to oust the chief executive officer of TAP after a rescue of the nation’s leading airline has created an urgent vacancy to fill at a time when a broad overhaul is needed, Bloomberg News reported. As the government agreed to boost its holding in loss-making TAP to 72.5% on July 2, it simultaneously ended the tenure of Antonoaldo Neves after more than 2 1/2 years at the helm. Finding a new CEO could take at least 60 days, said Fernando Neves de Almeida, managing partner of headhunter Boyden Portugal, which isn’t involved in the executive search.
The Portuguese government agreed to buy David Neeleman’s indirect stake in TAP SGPS SA as part of a plan to provide a rescue loan to save the airline, Bloomberg News reported. “This allows us to unblock the loan and avoid the bankruptcy of a company that’s essential for the country,” Finance Minister Joao Leao said at a press conference in Lisbon on Thursday night. Like other carriers, TAP had to halt most of its operations due to the coronavirus outbreak.