Flag carrier TAP is ‘zombie black hole in economy’

  • Lusa
  • 28 September 2021

The economist Susana Peralta called the flag carrier TAP a "kind of 'zombie' black hole" in the Portuguese economy.

n an interview with Lusa, economist Susana Peralta called TAP airline a “kind of ‘zombie’ black hole” in the economy, as part of the discussion on the support that should be given to companies in 2022.

Asked about the so-called ‘zombie’ companies, which are in business but in a weak situation, dependent on external support and struggling to meet their obligations, Susana Peralta gave two different examples of the government’s approach: TAP and Dielmar.

The university professor said that the government has let Dielmar go under.

“But the government has not done that with regard to TAP. We have the largest ‘zombie’, a kind of black hole in our economy, and the government, for some reason, wanted to drop Dielmar, but didn’t want to drop TAP? Personally, I don’t understand why”.

The economist considers that a company should be helped when “it has a cyclical problem” in which the help “allows it quickly, in a short period of time – a year, two years, six months, I have no idea – to get back on its feet”.

In the case of TAP, the economist feels that the problem of sunken costs is added.

“I’ve spent €1.2 billion on TAP, now it’s only 800 million more’. It’s wrong reasoning from an economic point of view”.

“Even after spending all this, it’s always better to let it fall when we think it has no legs to stand on”, Susana Peralta considers.

On the other hand, the lecturer at Lisbon’s Universidade Nova stressed that “it is very important to keep dropping companies without ever dropping people”.

“Companies don’t eat yoghurts, people do. We always have to make sure that people have food in their homes”, she said, considering, for this reason, that it is “necessary to support people with income, of course”.

Support is given “not only with income, but also with active employment policies, training policies”, as Portugal has “double the percentage of adults without secondary education” of the European Union.

So, in terms of social support, Susana Peralta “would really like to see a State that extends the blanket, that makes it less lumpy”.

“By extending it you’re going to more people, by making it less bumpy you’re making the sieve at each level of income or education a tighter sieve to get more people in. That’s going to cost more money, but I think it’s very important to give people security”.

“One of the ways to give them security, and it is not the only way, is to make sure that people get to the end of the month with money to pay the bills,” she stressed.