Air France-KLM to make formal show of interest for TAP this month

Airline group Air France-KLM is to formally make a Manifestation of Interest in buying a sizable share in Portugal’s airline TAP after having studied the Terms of Sale.

The news comes straight from the horse’s mouth after the group’s CEO Ben Smith said that the group was “definitely interested” in buying the non-controlling part of Portugal’s national carrier during a conference call presenting third quarter results.

“We are definitely interested. We intend to formally present our Manifestation of Interest in having a capital share in TAP and this should happen at the end of the month.”

The CEO went on to say that at the current phase no contacts have been made with the government or other entities which will only happen further on in the process.

In July, the government approved the reprivatisation of 49.9% of TAP, including 5% for the employees.

The privatisation process is open to airline companies with an annual business turnover of €5Bn with a Manifestation of Interest delivered to Parpública – the holding that controls Portugal’s State-owned companies – by November 22.

The Air-France-KLM Group announced a fall of 7% in profits in the third quarter to €768 million because of an adverse environment marked by a fall in flights to the US and an increase in expenditure.

According to the results published on its official website, the Franco-Dutch group was also affected by the relatively weak performance in cargo transport and its low-cost airline, Transavia, during the summer season, which is generally the most profitable period for airlines.

The operating result reached €1.2Bn in the third quarter, an improvement of €23 million compared to the same quarter, which was impacted by the Olympic Games. Revenue increased by 2.6% compared to the previous year, reaching €9.2Bn.

Source: ECO