Portuguese airline TAP to be privatized despite rise in losses

29 August 2011

Lisbon, Portugal, 29 Aug – The Portuguese government has kept airline TAP – Air Portugal on its list of privatisations to be carried out despite the company posting increased losses in the first half of the year, according to the Portuguese press.

In the first six months of 2011, the company posted a loss of 137 million euros, as compared to a loss of 79 million euros in the same period of 2010.

The 73.4 percent rise in losses was mainly due to a rise in fuel prices, an expense that rose 43 percent between January and June, reaching a total of 325 million euros.

The agreement between the Portuguese government and the group know as the “troika” made up of the International Monetary Fund (IMF), the European Commission (EC) and the European Central Bank (ECB), decided that the airline should be privatised along with airport manager ANA – Aeroportos de Portugal, rail cargo company CP Carga, water company Águas de Portugal, postal company Correios (CTT), television station Rádio e Televisão de Portugal (RTP) and the insurance arm of state financial group Caixa Geral de Depósitos.

The International Airlines Group (which resulted from the merger of British Airways and Spain’s Iberia) has already requested details of the operation.

TAP’s 10 routes to Brazil, with a total of 75 flights per week, are the main attraction for airlines such as Qatar Airways and Angola’s Taag.

A partnership with TAM-LAN, which was the result of a merger between Brazil’s TAM and Chile’s LAN, is also seen by specialists as more beneficial in terms of developing TAP’s Brazilian and African routes, which have potential growth of 7 percent by 2014. (macauhub)