The Portuguese government have finally reached an agreement with TAP Air Portugal shareholders for the airline to be re-nationalised with the government acquiring a 72.5% stake in the Portuguese carrier with an investment of 55 million euros ($62 million).
Airbus A321neo delivered to TAP Air Portugal in March 2019 Photo by Karam Sodhi | AeroNewsX
Back in March, TAP temporarily laid off most of their employees and suspended flight operations almost entirely, due to the collapse of air travel. Before the pandemic, the all-Airbus fleet airline operated an average of 2,500 flights a week to over 90 destinations worldwide. The Portuguese carrier who has been a member of Star Alliance since 2005 also has routes to 10 airports in Brazil and 1 in Venezuela.
The agreement, which was announced following lengthy negotiations, will see the Portuguese state increase their stake in the flag carrier airline from 50% back in 2015 to a majority shareholder position of 72.5%. The Council of Ministers signed off on the proposal for the carrier on Thursday after recognizing the public interest in keeping the airline operational.
In a press conference, the Minister of Infrastructure and Housing, Pedro Nuno Santos said: “TAP is too important for the country for us to accept the risk of letting such a company fall.”
Minister of Finance, João Leão agreed with his ministerial colleague that the investment was made “in order to avoid the collapse of the company.” The Minister for Finance also outlined that the airline will not be managed by the government and a private company will be appointed in due course to manage the Portuguese based carrier. During the press conference, João Leão stated that “a selection process” will take place to find a company and the government minister assured the media that they “will look for a qualified team in the international market to manage TAP.”
According to Reuters, Portuguese entrepreneur Humberto Pedrosa will hold the remaining 22.5 per cent stake in the airline, while TAP employees will keep the remaining 5 per cent stake. Mr Pedrosa previously held a 45 per cent stake in the airline through a private consortium called Atlantic Gateway. The private company was led by Brazilian-U.S. airline entrepreneur, JetBlue founder and owner, David Neeleman. However, the new proposal agreed by both the Portuguese government and TAP shareholders will see Mr Neeleman withdraw from being a shareholder in TAP as the consortium had suffered significant losses in 2018 and 2019.