The Court of Justice of the European Union (EU) on Wednesday said that the conditions of the Portuguese government in the reprivatisation of flag carrier TAP were "in conformity with EU law".
In question is the ruling of the Court of Justice of the EU, known on Wednesday, regarding a complaint lodged by the Portugal’s Associação Peço a Palavra (‘I Want to be Heard Association’) at the Public Prosecutor’s Office and the European Commission in 2015 challenging the reprivatisation of TAP, claiming suspected illegality in the tender.
“The conditions set by the Portuguese government for the reprivatisation of TAP are compatible with EU law with the exception of the requirement to maintain and develop the existing national hub,” the court said in a statement.
In the complaint presented by the association, together with four individuals, the entity said that “some of the requirements included in the tender specifications of the reprivatisation infringed the freedom of establishment and freedom to provide services laid down in the Treaty on the Functioning of the European Union (TFEU).”
For this reason, Portugal’s Supreme Administrative Court decided to submit the matter to the EU court on compliance with the EU law.
The ruling said that, regarding the requirement to comply with public service standards, the court considered that this is inscribed in the specifications signed between the Portuguese government and Atlantic Gateway, as there are obligations such as “where applicable, flight connections between the main national airports and the airports of the autonomous regions, and the continuation and further development of the routes serving the autonomous regions, the diaspora and Portuguese-speaking countries and communities.”
As for the obligations regarding keeping the headquarters and effective management in the country, the court said that “those requirements effectively constitute restrictions on the freedom of establishment, since they prohibit, impede or render less attractive the exercise of that freedom, in so far as they mean, for the purchaser, restrictions on the decision-making powers normally open to TAP SGPS’s corporate bodies
In the opposite view, the court said that “the requirement to maintain and develop the existing national hub goes beyond what is necessary to attain the intended objective of ties with the Portuguese-speaking third countries concerned.”
This court, based in Luxembourg, only issues recommendations based on the community law, and national bodies are responsible for a decision.
Currently, TAP is 50% owned by the state and the remaining capital belongs to the Atlantic Gateway consortium (45%) and workers (5%).