TAP: No sale, won’t survive

The future of TAP is back on the agenda in Portugal’s parliament this week as the airline’s part-privatization kicks off.

Portugal’s Minister of Infrastructures, Miguel Pinto Luz, told MPs that TAP will not be sold “on the cheap” and could not “survive in State hands”.

“We have a responsibility for TAP and it won’t survive if it remains in public hands. The State cannot inject another euro,” he said.

The minister added that did not have market synergies, couldn’t buy aircraft and could not continue on as it was.

“We want TAP, its routes and hub, but as it stands now we can’t do it”, he stressed in questions from MPs at the voting session to agree the sale on Tuesday.

Several MPs criticised the fact that the government was only opting to sell 49.9% of the airline’s capital.

But the minister said that by selling the minority share, the State would maximise the value of the remaining share, adding that this had been the case with other airlines such as SAS and ITA.

When quizzed on the sale of the minority share after successive governments had injected €3.2Bn into the airline, and its angling the sale at large European airline groups which the EC’s competition authority would have to agree to, suggested that the 49.9% percentage opened the door to airline companies that are not in Europe, such as those in the Middle East.

Despite being asked for the book value of the airline – which the government has refused to divulge because it would undermine the negotiating process with potential buyers (the last time the airline was valued it was potentially worth €1.1Bn), André Ventura, the leader of the far-right populist party Chega, said that if the current value was similar, it would be a “dreadful deal for the State” garnering only €500 million.

“How long will it take for (the taxpayer) to get back the €3.5Bn that had been injected in TAP? How much is this company worth, -this bottomless well” (which we’ve poured so much money into), he asked.