The Regional Government of the Azores has approved a new share issue for its ailing airline, SATA and has spent €27 million on buying up 5.4 million new shares to cover 2017 losses.
SATA will issue 5,400,000 new shares in return for the money, "This decision aims to strengthen the company's net worth and provide it with greater economic and financial strength, making it possible to fulfill its purpose of inter-island air transport," came the limp explanation from the regional government.
"The increase in the share capital of SATA is included in the broad restructuring of the public sector business of the Region that has been outlined by the Azores Government, which focuses on strengthening the economic and financial strength of the companies held by the Region," according to the document issued to the media.
The airline reported a €32 million operating loss for 2017 and managed to make an overall loss of €42 million.
The airline had a go at justifying these results by blaming, a "25% rise in fuel prices, the increase in operational irregularities in 2017, including strikes, as well as aircraft incidents at airports in Boston and Lisbon, faults registered in the A310 fleet, the recession in the North American market, as well as a more aggressive positioning of others market players." This all led to a 19% increase in costs.
The SATA Group's directors did point out that in 2017 there was "an increase in operating income of around €17 million compared to the previous year." "This increase is due to the greater number of passengers carried, which registered a positive year-on-year change of 18%, in line with the 22% increase in capacity offered."
