European Commission will probe whether TAP’s €3.2B restructuring plan complied with EU state aid rules after approving €1.2B loan to the airline.

TAP Air Portugal, a Portuguese airline, has been losing money for years. Its current restructuring plan would see a €3.2 billion state aid and an ambitious overhaul plan with thousands of job cuts and significant fleet reduction.

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TAP Air Portugal is reportedly preparing to cut 3,600 jobs and downsize its fleet. 
 

At the same time, EU finally greenlit the €1.2 billion loan that approved in June 2020. It has been challenged in court by Ryanair, and annulled in May 2021; nevertheless, the Commission found it to not infringe on any rules, and the loan was re-approved.

As per the restructuring plan, TAP is supposed to readjust its operations before 2023, but the plan also includes additional half-a-billion in case the airline is unable to access the financial markets by 2023-2025. 

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The Portuguese government reached an agreement with the private shareholders of the TAP airline. The state will increase its share in the company to save it from bankruptcy.