TAP restructuring waiting on Brussels

By TPN/Lusa, in Business · 16-07-2021 01:00:00 · 0 Comments

The Minister of Infrastructure and Housing has said that negotiations on the TAP restructuring plan with the European Commission (EC) are closed, hoping that it will be approved by Brussels “in the next few days” or “in the next weeks”.

Pedro Nuno Santos also explained that TAP “is going through a restructuring process, which it has never gone through before in its history”.

“We had almost 10,000 workers, and we have, at the moment, about 7,000 workers. If this is not a restructuring, what is it?” asked the minister, stating that the company will lose “a quarter of its workforce”, with the departure of 2,400 workers.

The government official also pointed out that, by December, the company will lose around two dozen planes.

“TAP, by the end of the year, will have 20 fewer aircraft than at the beginning of 2020, between sales and returns. We went from 108 to 88 planes. Today we already have fewer routes. We have a company that has already reduced almost 25% of its workforce, we have pilots with 50% wage cuts, workers with 25% cuts in their wages, 2,400 fewer workers, fewer routes, fewer flights”, he explained.

Pedro Nuno Santos added that the Government is “saving a decisive company for the Portuguese economy”, with the restructuring plan at TAP.

In December last year, the Government delivered to the European Commission (EC) the initial proposal for the restructuring plan for TAP, which provides for state aid of 970 million euros for next year.

The Government added that the document sent to Brussels “incorporates a significant transformation in the operation” of the airline, in order to “guarantee the viability and sustainability” in the “medium term”.

The delivery of this proposed restructuring plan was imposed by Brussels as a condition for approving state aid of up to 1.2 billion euros to the airline.

From that date, the company had six months to present a restructuring plan to demonstrate that the company had future viability, as the European Commission understood that the company was already in a difficult financial situation before the covid-19 pandemic and therefore is not eligible for specific support for companies that are suffering the impacts of the health crisis.



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