Air France-KLM still interested in TAP despite political crisis
"The fact that there could be a delay of six or 12 months doesn't seem material to me, but we would like to have visibility [definition of the process] as soon as possible," said Ben Smith, group CEO.
Air France-KLM said on Thursday that it remains interested in privatising TAP even if it is postponed due to the political crisis in Portugal. However, it asked for definition and stability as soon as possible.
“The fact that there could be a delay of six or 12 months doesn’t seem material to me, but we would like to have visibility [definition of the process] as soon as possible,” said Ben Smith, the group’s chief executive officer (CEO) at the press conference as part of the presentation of the 2024 results.
He also said that they were monitoring the situation in Portugal and hoped for’ stability” so that they could move forward with the process.
On Wednesday, the president of Portugal, Marcelo Rebelo de Sousa, admitted the possibility of early elections in May, at the end of a day in which the prime minister announced a motion of confidence – already approved today in the cabinet – which has the promised rejection of the two largest opposition parties, PS and Chega, and which should dictate the fall of the government next week.
During the conference, Ben Smith also acknowledged that they are interested in buying the 20% stake in Air Europa held by IAG, owner of Iberia and one of the interested parties in TAP.
“There are three or four airlines that are still independent, in other words they are not part of the three big European groups,” he said, referring to TAP, Air Europa and Finland’s Finnair.
“Air Europa is an interesting family airline. It has a different network to TAP and doesn’t focus so much on Brazil,” he added.
Ben Smith confirmed that they are looking at Air Europa and TAP. “I can’t say which airline we prefer,” he said.
When asked why Air France-KLM is the best candidate to buy TAP compared to Lufthansa and IAG, Ben Smith did not hesitate to mention its relations with the governments of France and the Netherlands.
“Of the three groups in Europe, we are the only one that has worked successfully with two governments,” he emphasised.
Air France-KLM’s largest shareholder is the French state, with 27.9%, followed by the Netherlands, with 9.13%. The structure also includes France’s CMA CGM, with 8.8%, China Eastern Airlines, with 4.58%, and the US company Delta, with 2.8%.
“We have two governments in our shareholder structure and the relationship works well. Our strategies are aligned, and I think they are attractive to the Portuguese government. I can’t speak for them, but I think that makes us more attractive because we have 20 years” experience,” he added.
Last week, on a visit to Portugal, French President Emmanuel Macron defended an “innovative form of marriage” between Air France and TAP.
The French president’s entourage also included the CEO of Air France-KLM, who, in statements to the press, had already said that the group is ready to present its project for the privatisation of TAP, maintaining the brand and the hub, conditions already disclosed by the government for the sale of the Portuguese company.
The group closed 2024 with operating profits of 1.6 billion euros, a drop of 6.4%, it was announced today.
Despite strong demand and growth in tourism globally, Air France-KLM’s annual results were impacted by strikes at the beginning of the year and increased costs, just like Lufthansa, which also reported an 18% drop in profits, justified by the same reasons.
According to the 2024 results presentation, the Franco-Dutch airline group’s revenues grew by 4.8% to 31.5 billion euros, driven by a 3.6% increase in capacity, stable unit revenues, and an increase in third-party maintenance revenues.