TAP's restructuring plan was submitted to the European Commission one year ago, but the airline is still waiting for a response from Brussels.
The Portuguese government submitted TAP’s restructuring plan to the European Commission one year ago. However, although measures such as reducing employees have been implemented, the airline is still waiting for a response from Brussels.
After the European Commission approved state support of up to €1.2 billion for TAP on 10 June 2020, the company had six months to present a restructuring plan to convince Brussels that the company has future viability.
The Boston Consulting Group (BCG), chosen by the airline, was in charge of drafting the plan, and the document was sent to Brussels on the last day of the deadline, December 10 2020.
However, a year later, the restructuring plan is still waiting for a decision from Brussels, a ‘gift’ that Finance Minister João Leão hopes will arrive before Christmas, as, according to Leão, discussions with the European Commission are in the final stages.
TAP’s restructuring plan, sent at the end of 2020 to the European Commission, provided for the departure of around 2,000 employees, including 750 cabin crew, 500 pilots and 450 maintenance and engineering workers and 250 from other areas.
The plan also included a 25% reduction in salaries and the number of aircraft, from 108 to 88.
In March, the government, which owns 72.5% of TAP’s capital, asked the European Commission for interim aid to the airline of up to €463 million to ensure liquidity until it was approved.
In August, the European Commission acknowledged it feared the €3.2 billion restructuring aid for TAP violated competition rules, a complaint that has been repeated by other airlines such as Ryanair.
Brussels also said it doubted that the 3.2 billion support would guarantee its viability for good, although it recognised the importance of the Portuguese state rescuing the airline.
According to the report accompanying the 2022 draft budget, the government plans to inject almost €2 billion into TAP this year and in 2022.
In addition, according to the proposal, “it is foreseen in the Restructuring Plan presented to the European Commission, in its central scenario, that 2022 will be the last year in which the Portuguese state injects money into TAP, amounting to €990 million.”