TAP worsens losses to 108 million in the first quarter. Easter in April and pilot strike hurt results
The first quarter is always the most difficult for aviation and TAP's was even more negative this year, with a 4.5% drop in revenues and an increased loss of 18 million.
TAP closed the first quarter with a loss of 108.2 million, 18.1 million more than in the same period last year. The result was penalised by a drop in airline ticket revenues, which the company attributes to the fact that Easter this year fell in April rather than March, and the Portugália pilots’ strike. The American market held up, but the Brazilian market fell as competition increased.
“2025 began with a challenging quarter, marked by the Portugália pilots’ strike and the Easter holiday. In addition, increased competition in the main markets and operational disruptions, such as adverse weather events, strikes and constraints at airports and in European airspace, had a significant impact on the quarter’s financial and operational performance”, said CEO Luís Rodrigues in a statement.
TAP recorded operating revenues of 823.4 million between January and March, 4.5% less than in the same period of 2024. In addition to the factors mentioned above, the company points to the stabilisation of capacity (TAP is prevented by the restructuring plan from increasing the number of aircraft) and increased competition in the main markets, namely Brazil, which put pressure on ticket prices.
Revenues fall 6% in Brazil
Despite fears about a slowdown in travel to and from the US due to the deterioration of the economic context, the carrier says that the North American market had a “positive performance”, “sustained by an increase in unit revenue [+5%] and load factor [occupancy rate]”.
In South America revenue per passenger had a negative evolution (-6%), with the company highlighting an 18% increase in the capacity offered by competitors. In Europe the drop was also 6%, while in Africa revenue per passenger grew by 3%.
The number of passengers carried, 3.51 million, was practically unchanged compared to the first three months of 2024, with the occupancy rate falling very slightly to 78.8%.
The Maintenance business, which has been performing well, didn’t grow this quarter either, with revenues falling 0.8% to 44.3 million. “This variation reflects a slight reduction in activity due to constraints in the supply chain that affected work execution deadlines, which was partially offset by better commercial conditions”, explains TAP. Cargo and mail revenues increased by 6%, but weighed little on the overall result (2.2 million euros).
On the expenses side, the airline reports a 2% increase to 955 million euros, driven by a 19 million euro increase in staff costs, following “wage and salary increases agreed in the collective labour agreements”. Traffic operating costs rose by 4.7%, while fuel costs fell by 7.7%.
Expenses were also penalised by the 140.5% increase in impairment of accounts receivable and provisions, to 16.5 million, which is “mostly explained by the reinforcement of provisions for compensation to customers resulting from the PGA pilots’ strike”.
Between revenues and costs, the operating result was a loss of 131.6 million, 57.3 million more than in the same period last year. TAP estimates that moving Easter to the second quarter and the Portugália pilots’ strike had a financial impact on operating results of between 30 and 40 million.
Earnings before interest, taxes, depreciation and amortisation (EBITDA), which had been positive in the first quarter of 2024, fell by 52.5 million and was negative by 9.5 million. Recurring EBITDA totalled a positive 2.9 million.
Net financial debt almost halves
Despite the increase in gross financial debt, to 1,601.2 million, TAP’s net debt almost halved to 398 million, due to the sharp increase in cash, to 1,203 million, to which the entry in January of the third instalment of state capital, to the value of 343 million, and the additional issue of senior debt to the value of 200 million, carried out at the beginning of March, contributed.
Regarding future prospects, the airline notes that “bookings are currently in line with the previous year, showing a marked recovery since the beginning of the year, and should offset the pressure on unit revenues in the face of the estimated increase in capacity”.
TAP expects increased competition in the main markets, although with different intensities. “In Brazil, the focus is on optimising the quality of revenues, keeping load factors stable with quality yields, taking advantage of TAP’s extended network, despite the pressure on unit revenues”, the statement said.
The carrier will continue to modernise its fleet, with the delivery of one A320 NEO and two A321 NEO aircraft planned.
