Portugal's government has notified the European Commission it intends to grant "interim aid" to TAP, allowing the airline to obtain liquidity until the restructuring plan is approved.
The government has asked the European Commission for authorisation to grant TAP a maximum “interim aid” of 463 million euros, in order to guarantee the airline sufficient liquidity until the restructuring plan is approved.
“The Portuguese government has submitted a notification to the European Commission to grant interim aid to TAP, which will allow the airline to ensure liquidity until approval of the restructuring plan,” said the joint statement sent on Friday by the Finance Ministry and the Ministry for Infrastructure and Housing.
In the same document, the Portuguese government explains that, although the air carrier “is in assistance under the Emergency and Restructuring aid, under the Restructuring Plan negotiations between Portugal and the European Commission, it was accepted that aid of up to 463 million euros could be notified.”
This sum will serve to reduce the cash needs for 2021 that were included in the Restructuring Plan. “The present aid notification, which is expected to be approved by the Commission soon, allows TAP’s cash flow needs to be addressed more immediately.”
However, António Costa’s government explain that, as a consequence, the “amount of the company’s cash needs in the Restructuring Plan will have to be adjusted” and that this whole situation “stems from the particular severity of Covid-19’s impact on the aviation sector.”