EU approves €1.2 billion rescue for TAP Air Portugal
The European Commission has given the green light for a €1.2 billion rescue loan destined for Portuguese flag carrier, TAP Air Portugal. This comes amid troublesome times for the aviation industry as a whole, which has suffered dramatically largely due to a significant reduction in travel demand.
On 9 June, 2020, Portugal informed the European Commission that it intended to provide financial support for flag carrier, TAP Air Portugal. The European Commission has given the airline six months to either pay back the loan or submit a restructuring plan, having been in financial difficulties prior to the coronavirus crisis. Its debt totals an estimated €800 million.
The European Commission notes that the latest move allows it to indirectly support the Portuguese tourism industry.
"This €1.2 billion Portuguese rescue aid will help TAP Air Portugal face its liquidity needs and pave the way for its restructuring to ensure its long-term viability. In a sector that has been hit particularly hard by the coronavirus outbreak, the measure will help avoiding disruptions for passengers. With the progressive lifting of travel restrictions and the upcoming touristic season, it also indirectly benefits the Portuguese tourism sector and economy as a whole. We continue working closely with Member States to find solutions to support companies in these difficult times in line with EU rules," explains the EU's Executive Vice President of competition policy, Margrethe Vestager.
The latest announcement, however, makes no note of environmental concerns. Indeed, TAP Air Portugal has, over the last few years, been renewing its fleet and therefore reducing its environmental footprint with the use of more modern aircraft. Instead, the European Commission says the green light towards this loan was to address the carrier's immediate liquidity requirements and long-term viability.
TAP Air Portugal has, similarly to many other airlines, been preparing for a return to regular passenger operations in an attempt to take advantage of what remains of this year's summer season.
Over the last couple of months, TAP Air Portugal has operated a number of cargo flights as well as repatriation services. The airline has been offering regular cargo flights between China and Portugal and operated humanitarian services from the likes of Mozambique and Peru to name a few. The Portuguese flag carrier also maintained links to select cities across its network including in Brazil and across Europe.
TAP Air Portugal has been growing and renovating its fleet over the past couple of years and now has more than 100 aircraft in service. In 2019, TAP Air Portugal transported in excess of 17 million passengers to over 90 destinations in 38 countries.
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