TAP’s capital injection expected to be around one billion euros

  • ECO News
  • 22 May 2020

The capital Injection into TAP should follow a similar model to that applied in other countries: the ratio between the number of aircraft and the number of passengers carried in 2019.

Practically halted for about two months because of the Covid-19 pandemic, TAP is expected to receive a capital injection in the order of one billion euros, advances Radio TSF this Friday, citing a source close to the negotiations. ECO had already revealed at first hand that TAP’s capitalisation requirements would be at least one billion euros.

According to the radio, a similar model to that applied in other countries should be followed, in which they have already provided aid to their airlines: the ratio of the number of aircraft to the number of passengers carried in 2019. Swiss Air, for example, which has 107 aircraft and carried 21.5 million passengers last year, received public aid worth 1.4 billion. TAP has a fleet of 105 aircraft and last year carried 17.1 million passengers.

There are three scenarios on the table concerning the capital injection: through temporary support, with private debt guaranteed by the state up to 90%; with the so-called damage compensation – where the state can guarantee up to 100% and the preferred solution of Atlantic Gateway’s private shareholders, David Neeleman and Humberto Pedrosa; or through emergency support that implies a restructuring of the company.