Tap sees uncertain market driving key investor search

Bloomberg

Portugal’s state-owned airline Tap SA said a new investor would put it on a more solid footing as it pushes ahead with a restructuring program amid higher fuel costs and increasing geopolitical uncertainty.
“It’s a very difficult market,” Chief Executive Officer Christine Ourmieres-Widener said. “Fuel costs are increasing. We could have wars, we could have pandemics, so being part of a larger group of course gives more foundation to any airline. But it should be the right partner.”
While the final decision will rest with Tap’s government owner, which recently funded a 2.55 billion-euro ($2.7 billion) bailout and is on the lookout for a new stakeholder, any backer must be committed to “the long term growth, and DNA, and sustainability of the company,” she said at its headquarters in Lisbon.
Tap has gone through a torrid few years even by the standards of an aviation sector rocked by the coronavirus crisis. While most other European flag carriers belong to three groups based in the region, the Portuguese firm was sold to the Atlantic Gateway consortium led by airline entrepreneur David Neeleman. After the deal soured the government regained control, lifting its stake in holding company Tap SGPS during the pandemic and becoming sole owner in December.
The ownership change was accompanied by the bailout, approved by the European Union only after Portugal agreed to slash TAP’s costs through job losses and swinging cuts to the fleet. Ourmieres-Widener, the first female CEO in TAP’s 77-year history, said the topic of investment is “very sensitive” and “should be dealt with by the shareholder.”
TAP is relying on code-share deals and its membership of the Lufthansa-led Star Alliance to bolster its business after posting a net loss of 1.6 billion euros last year, hurt by measures including the closure of a maintenance business in Brazil.
Like other European airlines, Tap has seen a trend towards passengers spending more on journeys.