EU approves further €71.4M state aid for TAP due to pandemic
The endorsement given by the Commission is for an amount of €71.4 million "to compensate TAP for the damage suffered between January 1 and June 30 2021 as a direct result of the travel restrictions."
The European Commission on Wednesday approved a further €71.4 million of Portuguese state aid to TAP, one day after approving the restructuring plan and €107.1 million of aid due to the pandemic.
A day after approving TAP’s restructuring plan and state aid of €2.55 billion, while imposing some ‘remedies’, the European Commission points out that TAP “plays a key role in the growth of tourism and the Portuguese economy as a whole and is a significant employer in Portugal,” accounting in 2019 for over 50% of arrivals and departures at Lisbon airport, hence the approval of the new Portuguese scheme.
The endorsement given on Wednesday is for an amount of €71.4 million “to compensate TAP for the damage suffered between January 1 and June 30 2021 as a direct result of the travel restrictions in place to limit the spread of the virus”, it is stated.
“Due to these restrictions, TAP Air Portugal suffered significant operating losses and experienced a sharp decline in traffic and profitability during this period,” Brussels notes.
Noting that this state aid “follows previous support measures” approved last April and this Tuesday, the EU executive explains that the new compensation “will take the form of a capital injection or a loan that can be converted into capital”.
“The choice between these forms of support will be made by the Portuguese government,” the institution points out.
Arguing that “the Portuguese measure will compensate damages directly related to the coronavirus outbreak”, the Community executive concludes that the aid is “proportional, since the compensation does not exceed what is necessary to repair the damage”.
“On this basis, the Commission has concluded that the Portuguese measure complies with EU state aid rules,” the Brussels statement said.
Also on Tuesday, the European Commission gave the ‘green light’ to Portuguese state aid of €107.1 million for TAP, to compensate for the negative consequences of the pandemic in the second half of last year.
