TAP Air Portugal has reported a loss of €119 million in the first six months of 2019 – more than the €118 million loss the airline recorded for the whole of 2018. In a statement, the Lisbon-based airline said the first half of 2019 has been a “global negative period for civil aviation in Europe” and that its poor performance is an experience shared by many other European flag carriers.
Airlines around the world have blamed oil price volatility, the strong U.S. dollar and a capacity surplus for dampening financial performance in the last couple of years.
TAP Air Portugal is 45% owned by a private consortium led by David Neeleman – most known for founding jetBlue and currently involved in the creation of a new “millennial” airline which is only known as Moxy Airline at present. Neeleman is also directly involved in Brazil’s low-cost Azul Airlines.
A 50% share of the airline still belongs to the Portuguese government, while the remaining 5% is employee-owned.
Despite heavy losses in the first half of 2019, TAP Air Portugal says it still expects its full-year results to beat 2018. The airline says that a successful cost-cutting programme that has reduced costs by 8%, as well as strong ticket sales in important markets like Brazil should see an overall performance going into the second half of the year.
An ongoing fleet renewal should hopefully continue to save costs with lower fuel spend and more efficient aircraft. TAP Air Portugal is utilising single-aisle Airbus A321LR (long-range) aircraft on routes to Northern Brazil, as well as to Tel Aviv (the airline’s first destination in the Middle East) and Moscow.
Last year, the carrier increased the number of destinations it serves by 12% and has grown the number of passengers carried from its Lisbon hub by nearly 15% in the last 18-months. A second hub in Porto is also proving successful with new flights to Newark and São Paulo.
In June, however, TAP endured heavy criticism after it was revealed the airline had paid out €1.17 million in bonuses to senior executives despite its heavy losses. The airline faced a backlash from the Portuguese public who were effectively footing the bill as majority stakeholders in the business.
TAP has also faced a rocky relationship with its employees – especially cabin crew – who had contract renegotiated in 2017. At the time, the airline said it would provide proper rest facilities on all new widebody long-haul aircraft and would provide a minimum crew of four on all Airbus A319 flights – the minimum set by European regulators is three.
