TAP sale paperwork signed today amid ministerial relief

The paperwork was signed today allowing TAP to become privatly ownered.

Gateway now owns 61% of the former state airline as an inquiry starts in Brussels into whether the rules of ownership have been followed correctly.

The Minister of Finance, Maria Luís Albuquerque, was at the ceremony to ensure she got her cheque, and described the sale as inevitable.

"Taking into account the company’s persistent financial difficulties and the European Union's legal restrictions on re-capitalising public companies, privatisation represented the only solution for the viability of TAP," said the minister.

Albuquerque said that there was cause for celebration as there is a 10-year guarantee to keep TAP’s headquarters and management in Portugal. Also, that essential routes to Lusophone countries would have to be maintained (regardless of profitability.)

Economy Minister Pires de Lima was at the signing and said that the government was “doing what had to be done.”

The state now is off the hook for accumulated losses of over €1 billion and, if the airline is run well and recovers from its current financial position, the treasury can look forward to additional dividends from its remaining stake and from the eventual sale of its shares held on behalf of the taxpayer.

Gateway is owned by businessmen David Neeleman and Humberto Pedrosa who said "We are in business to stay," and that he and Neeleman are intent on growing TAP in a long-term, ambitious  project, but one which is solid and realistic.

"I am grateful" to take on this responsibility, said Neeleman. "We will do everything to use the capital to buy new aircraft and also to treat TAP staff well."

At the end of 2014, TAP’s debt was €1.062 billion, much of this in the form of short-term bank loans. The year-end loss for 2014 was a further €85 million due in part to a 22-day strike that hammered cash flow and triggered compensation payments.

The TAP Group employs 10,461 people, not including catering company workers and staff at the Duty Free Shops and the Maintenance and Engineering company in Brazil.

Now the company is owned privately by the two entrepreneurs, the expectation that current TAP president Fernando Pinto will step down to allow a new and more able management to assume control.

Meanwhile, over 100 TAP workers demonstrated against the privatisation of the airline, saying that the process is not closed and can still be stopped.

Politicians and trade unionists today urged the TAP workers to continue to fight against the privatisation of the company and offered their support.

Although the purchase of TAP has been have signed off, one communist party MP said that the PCP will continue to fight "this treason and economic crime" so that the country can "regain control over a strategic company."

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