TAP confirms reduction to 20% of planned pay cuts, raises threshold

  • Lusa
  • 14 February 2023

The cuts - which were to have been 25% - were expected to remain in effect, for most employees, until the end of this year.

Portugal’s national flag carrier, TAP, is to go ahead with the reduction to 20% of planned temporay pay cuts for for all its employees, as well as increasing the amount below which no cuts are applied, according to a message from the company’s executive board to employees, which Lusa has seen.

In the message, the board said that “TAP has been complying with the restructuring plan, particularly with regard to increasing revenue and also reducing costs” – stressing that the reduction in costs “has been made not only through salary cuts, but also by renegotiating contracts with suppliers and establishing more advantageous partnerships or efficiency gains” among other measures.

However, it recognises, the “acceptance of the Emergency Agreements by the Unions, representing all workers, was crucial for the success of TAP’s recovery.” It also warns that the “road to recovery is not yet over, it is still being travelled” and recalls that “the temporary emergency agreements are in force until the end of 2024.”

Even so, it stresses, “with the efforts of all the workers and with proper management, TAP’s financial performance is above the restructuring plan projections” and so amendments to the plan can be made.

“This performance allows us to anticipate the reduction” of salary cuts – to 20% above the minimum threshold – “recognising in this way the effort of all workers,” the TAP statement adds.

The cuts – which were to have been 25% – were expected to remain in effect, for most employees, until the end of this year.

In addition, the executive board statement says, “due to the increase in the national minimum wage (SMN), the amount – equivalent to two SMNs – below which no cuts are applied (minimum guarantee) is also updated to 1,520 euros.”

It guarantees that “the combination of these two factors – cut reduced to 20% and updating of the minimum guarantee without cut to 1,520 euros – increases the number of workers without a cut, and the effective cut of the part of salaries above the minimum guarantee is also reduced.” It stresses that “in practical terms, the real salary cut, at TAP SA [the aviation business], now averages 7.3%.”

Finally, recognising the efforts of employees, and taking into account inflation and the increase in interest rates, the executive board says that “other measures with a remuneration impact are being decided and implemented, adapted to the specificities of the professional categories” and that these “are applied retroactively from 1 January 2023 and will be in force until 31 December 2023.

“It is not ignored that the remaining cuts continue to force workers to make sacrifices and increased effort, but the measures now announced signal that TAP is on the right path to recovery,” the message concludes.