Portuguese airline TAP says turnaround on track despite fuel costs, FX -Breaking
LISBON (Reuters] – TAP’s restructuring is moving forward despite rising fuel costs and the appreciation in dollar to euro.
Christine Ourmieres – Widener, a member of a parliamentary panel said that they are currently implementing the “restructuring” plan. It will create a renewed TAP.
Brussels approved a rescue package worth 3.2 billion euro ($3.4 billion) that saved the 72.5% Portuguese-controlled airline. It reduced its fleet and cut over 2,900 positions, as well as lowered the wages.
TAP posted a loss record of 1.6 million euros in 2021, due to its Brazilian aircraft maintenance company closing. TAP also suffered from a weaker Euro. TAP hopes to improve operating results and make a profit in 2023.
The CEO stated that one of the biggest challenges facing the company is the estimated increase in fuel prices this year of 300 million euros. This impact will be felt over the remaining year.
Ourmieres-Widener reported that TAP was at 90% pre-pandemic, but warned of a weaker economic outlook and the possibility of strong consumer demand slowing down.
In recent months, after two years of travel restrictions due to pandemics, international airlines have seen a rebound. They are riding the wave of increased demand, which has encouraged them increase capacity. The industry is now at high risk due to a rise in global jet fuel costs, following Russia’s invasion.
We haven’t recovered because we fly at 90% of our 2019 capacity. We are working on a plan for recovery. Recovery means generating positive net income,” Ourmieres-Widener told lawmakers.
($1 = 0.9349 euros)