TAP reduces losses to €493.1 million in 2021 H1

  • ECO News
  • 27 August 2021

National airline stresses that "activity in the first half of 2021 remained very much affected by the effects of the pandemic and consequent restrictions on mobility".

TAP recorded losses of €493.1 million in the first half of the year, which translates into an improvement of €88.8 million when compared to the same period last year, according to a statement sent by the company to the Portuguese Securities and Exchange Commission (CMVM).

The national airline stresses that “the activity in the first 1H21 was still very affected by the pandemic effect and consequent mobility restrictions.”

The first quarter, when Portugal faced a general lockdown, had the most weight on the results. Total operating income for 1H21, which stood at €383.1 million, was “strongly affected by the 1Q21 restrictions, with a decrease of 40.7% when compared to the same period in 2020 (“1H20”) and of 73.6% when compared to 1st half 2019 (“1H19”),” the company signals.

Total operating costs reached €760.5 million in the first half of the year, a “decrease of €313.1 million (-29.2%) when compared to 1H20, mainly explained by the material reduction of the following captions: fuel costs (- 40.4%), traffic operating costs (-43.7%), personnel costs (-8.6%) and depreciation and amortization (- 20.8%),” TAP explains.

The company justifies the cost reduction with the restructuring measures implemented, namely the downsizing of the workforce. “since December 31, 2020 a total of 1,302 employees left TAP, representing a decrease of 16% in total labour workforce number, as well as the negotiation of the agreements with unions by which salary revisions were defined,” it states.

The airline is still waiting for the European Commission to approve the TAP Group’s restructuring plan, “while it continues to develop and execute measures to continue to decrease costs.”

TAP also recalls the capital increase of €462 million “to compensate the Covid-19 damages incurred during the period from March 19, 2020 to June 30, 2020”. In this operation, the company’s “share capital has increased from €41.5 million to €503.5 million, and the Portuguese Republic, through the DGTF, become a direct shareholder of TAP, with a shareholding of circa 92% in TAP, with the remaining circa 8% still being held directly by TAP – Transportes Aéreos Portugueses, SGPS, S.A. (“TAP SGPS”).”

Despite continuing to record losses in the first half of the year, the Portuguese airline highlights positive “signs of recovery” from April to June. In the second quarter, TAP carried 928,000 passengers, 136% more than in the previous quarter and the number of flights more than doubled compared to the first quarter.