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.

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. 

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.