Portuguese Airline TAP sees itself as Angolan airline Taag’s strategic partner.

3 November 2009

Luanda, Angola, 03 Nov – Portuguese airline TAP, that may be associated with Brazilian airline TAM, sees itself as a future partner for Taag, in the wake of the restructuring underway in the Angolan airline sector, aimed at turning it into a benchmark within Africa.

Fernando Pinto, the Brazilian manager presiding over TAP, was among the experts invited by Angola’s Transport Ministry to debate the restructuring of Angolan air transport and did not hold back his praise for the idea of a merger or association between the three Portuguese-speaking airlines, over the medium or long term.

Stressing that there was no concrete proposal on the table, he considered the connection between the three companies to be “a good idea”, although “it’s not the right time,” the Brazilian manager said in an interview to Novo newspaper.

“At Taag’s request we have participated mainly in training due to the common language and it has worked well. It is a partnership we have carried out in the area of handling, ground operations, operational security monitoring and others. Taag is expected to be flying to all of Europe in the near future,” he added.

Pinto also highlighted the need to improve TAAG’s services as well as its infrastructures.

This point was also made by the Transport ministry, Augusto Tomás, who estimated the financial injection needed to improve Angolan airline infrastructures at US$400 million.

However, said the Novo newspaper, the intention is for the strategic partnership to be made with a benchmark international company and for Luanda international airport to become the benchmark for the region.

The restructuring also includes the financial clean-up of Taag, leaving behind losses (US$72 million expected for 2009) for profits (US$60 million for 2012).

In Portugal and Brazil, the “good idea” to connect the Portuguese-speaking companies has been well received.

Brazilian airline TAM’s vice-president, Paulo Castello Branco, told the Diário Económico that the operation could be considered “in the near future.”

According to analysts Victor Mizusaki and Fernando Abdalla, of Itaú bank, the deal made sense for a TAM having difficulties growing internally due to competition from Gol.

“If the merger between TAM, TAP and Taag was clinched, TAM could increase its activity on the international flight market. The partnership would allow TAM to expand, mainly in Europe and Africa,” say the analysts in a report quoted by Exame magazine.

Currently, they point out, Brazilian legislation prevents foreigners holding more than 20 percent of ordinary shares (with voting rights) in a Brazilian airline, though the government is preparing an increase to 49 percent, which would remove this obstacle.

According to Francisco Ferreira da Silva, vice director of the Diário Económico, for TAP it would be “a way of overcoming the European Union’s prohibition of State financing, which makes any increase in capital impossible.”

“The merger of the three companies is not therefore simply a good idea; it would also be a good deal for the wider Portuguese-speaking market. (…) For Taag it would represent the solution to its weak point – aeroplane maintenance. And for TAM it would mean easy access to a demanding market like Europe. As for the agreement of the merger, there just needs to be the political will to carry it through. The rest is just a question of numbers,” said Ferreira da Silva. (macauhub)