TAP expects to make €35M with eight Airbus 320 aircraft

TAP is about to conclude the sale of eight Airbus 320 aircraft, hoping to raise between 35 and 40 million euros. The amount is included in the restructuring plan proposal sent to the European Commission, which was reviewed by the ECO. This operation is part of the fleet resizing that the airline is carrying out to adapt to the impact of the pandemic on travel demand. At the end of the period, in 2025, the fleet will be composed of 99 aircraft.

The “accelerated phase-out of eight A320fam in 2020″ is one of the cash flow saving measures that TAP presents to the European Commission as being already trying to implement. It states that “€35 to 40 million is expected in incremental value from the sale” of the aircraft. “The impact will be seen in January 2021, the expected date to complete the sale,” it explains.

However, it was not yet in January, according to the ECO. But the deal is about to be closed with a buyer who is not yet known. This may not be the only divestment as the restructuring plan foresees the same is being studied with 11 other aircraft.

The sales are being accompanied by other fleet reduction measures. TAP cancelled orders that had been placed, negotiated the return of some aircraft and agreed with Airbus to postpone the delivery of 15 new aircraft to 2022, deferring $1 billion in expenses.

The post-Covid strategy will focus on the hub, i.e. intercontinental and long-haul connections. The focus is on long-haul, but also on TAP Express (formerly Portugália). This double strategy is reflected in the fleet’s recomposition. Right at the beginning, there is a sharp drop to 88 aircraft (from 108 in 2020) which will be recovered throughout the restructuring plan period.

TAP should thus reach 2025 operating 99 aircraft, if the plan goes ahead on these terms. The Portuguese authorities sent the proposal – developed by the government, TAP and Boston Consulting Group – to the European Commission on December 10, and are still awaiting approval.