2020: TAP to lose over 900 million euros with Covid-19

  • ECO News
  • 24 February 2021

The airline will have had a negative consolidated operating result (EBIT) of 907 million euros, according to the projections sent to Brussels by the Portuguese government.

TAP closed 2020 with a negative EBIT of 907 million euros. The projection, which is present in the document sent in mid-December to Brussels by the Portuguese government, to which ECO had access, shows that revenues will have been around one billion euros, in a year strongly marked by the restrictions on aviation caused by the pandemic.

The “unprecedented crisis” for aviation and for TAP is heavily penalising the company’s accounts, explained both CEO Ramiro Sequeira and chairman Miguel Frasquilho this Tuesday in Parliament. They warned of the impact of the pandemic on the airline’s operations, which is waiting for the “green light” from Brussels to go ahead with a restructuring plan.

The projections in this document, to which ECO had access, show that TAP’s EBIT will have stood at -907 million euros in 2020, which compares with a positive 47 million euros at the end of 2019. The “gap” is due to the drop in operations as the company lost 13 million passengers last year. Estimates point to a 69% drop in revenue to 1,025 million euros (compared to 3,299 million euros in 2019).

The forecasts for 2020 were prepared before the year’s end and do not include figures for net results. Or at least this wasn’t included in the document delivered by the government in Parliament, which has several pieces of information erased. However, the accounts for the first nine months of 2020 already signalled the impact of the pandemic.

Between January and September, EBIT was negative by 610.2 million euros and revenues by only 841.3 million euros. Net income was negative 700.6 million euros in the first nine months of 2020, with the second wave of Covid-19 and the new restrictions imposed on mobility reversing the summer recovery trend.