Pedro Nuno Santos would have liked TAP to have lost fewer slots, but the real problem is Lisbon airport's capacity. Future infrastructures should be agreed upon between the PS and PSD.
Pedro Nuno Santos advocates an understanding between the Socialist Party (PS) and the Socialist Democratic Party (PSD) on the future location of the new Lisbon airport, to ensure that a definitive decision is reached after the strategic environmental assessment.
The minister for infrastructure and housing did not reveal how many slots Brussels wanted TAP to give up but said that there were many more. “The feeling we got, in the end, was one of victory,” he says. He also said that it was not a defeat for Ryanair, which would like to see more growth in Portugal, as soon as airport capacity allows.
On selling the shareholdings that TAP is forced to make, he admits that leaving Manutenção & Engenharia Brasil will cost €110 million. Groundforce, “a viable company”, should be sold in the coming months.
TAP will have to give up 18 slots, or nine take-off and landing pairs. The government’s initial proposal was six pairs. What impact does this have on the company?
Of course, it was difficult because for us TAP would not give up any of them. In other words, TAP would only give away those it wanted to, because sometimes this happens. TAP has already given away some slots over the years, slots that are of no commercial interest and for us, it would be no problem at all to lose 18 slots if they were chosen by TAP. They will not be.
How many are chosen by the Commission?
All 18. It will be with TAP because TAP knows the business, but the European Commission wants slots of commercial interest.
In practice, we didn’t want to lose any slots, but we lost less than the European Commission initially wanted us to concede.
How many slots did the European Commission actually want TAP to release?
I will not reveal that. I don’t think it is important. There were many more than these and that is why the feeling we had at the end was one of victory. We lost more than we would have liked to lose. In practice, we didn’t want to lose any, but we lost less than the European Commission initially wanted us to concede. Unfortunately, what is happening is that we have an airport whose capacity is saturated. What I would like, as minister of the Republic and as a Portuguese citizen, is for Ryanair, Easyjet or any other airline to be able to expand its operations in Portugal, without this having to be at the expense of reducing TAP, because TAP does business. If we had more airport capacity in the Lisbon region, this problem would not exist. What pains me most is that we are fighting for slots at an airport that unfortunately has no more slots, when Portugal could have already resolved this lack of airport capacity. All airlines could grow without cannibalising each other.
The PS and the PSD need to sit down and reach a consensus and an agreement on the location of the airport.
Do you already have a date for an answer to the alternatives available for the new airport?
No, because at the moment we are still in the tender process of selecting the company that will carry out the strategic environmental assessment. My ideas on alliances are more or less known. I think that in many matters the two major parties have to agree. The President of the Republic at the right time listed two matters where there should be consensus and a statement of position during the campaign: the airport and TAP. I have no doubt that when we finish this process of strategic environmental assessment, which must be the last, the PS and the PSD need to sit down and reach a consensus and an agreement on the location.
Not between the Socialist Party (PS), the Left Bloc (BE) and the Portuguese Communist Party (PCP)?
No. The more cross-cutting the agreement can be, the better. Unless things change a lot in the next few years, the PS and the PSD have more than 70% of the electorate. It is inevitable that an issue that will last beyond several governments must have a very strong agreement between the two major parties.
Is it not possible to carry out this strategic environmental assessment in less time?
No. To make a serious strategic environmental assessment is not possible. We could give it up, but we are only doing it because the PSD demanded it.
Ryanair is an important company operating in our country and we want Ryanair to continue to grow in Portugal.
Earlier you mentioned Ryanair. Is the European Commission’s approval of TAP’s restructuring plan a defeat for Ryanair?
No. Ryanair is an important company operating in our country and we want Ryanair to continue to grow in Portugal. And what Ryanair has demanded, in a context where the airport is slow, is slots, full stop. What Ryanair has been demanding is a new airport in Montijo. The only thing I can say about this, especially now that we are going to do the strategic environmental assessment, is that I am agnostic.
How much do Ryanair and other low-cost airlines receive from public entities such as town halls, tourism and regional governments to make the flights they do? TAP will get this subsidy from all the Portuguese. These companies also receive subsidies. Can you give us a number?
I would like to, but I don’t know. I do know one thing: to be serious and honest, there is no comparison with what is being done at TAP, which is an investment of unprecedented magnitude. What the low-cost companies receive, and TAP too, but less, is some support to promote certain destinations. And this makes the difference between these companies opening bases or not. Ryanair has now opened a base in Funchal, and made a €3 million agreement, I think, with a tourism institute. We are talking about small amounts.
Another important issue is the sales and/or liquidations that the group has to make of companies outside the core aviation business. As far as we know, Manutenção & Engenharia Brasil will end up being liquidated. Apparently, no interested parties have appeared willing to pay what TAP wants.
With the exception of Cateringpor, as regards the other two, work is already being done, for different reasons. In the case of M&E Brasil, the process has been going on for a long time. This TAP management was recently in Brazil to look for alternatives. But it has been very difficult. The situation at M&E Brasil is terrible. The contingencies are brutal. And so it is very difficult to find interested parties.
How much will liquidation cost?
Divesting or closing down will be the final destiny. Staying longer with it is unthinkable for us. Although it will cost money. At most, €110 million. If we had taken this decision much earlier, we could have saved hundreds of millions of euros, 800 to 900 million.
Why wasn’t this resolved earlier?
Don’t ask me. It was TAP SA that financed this, lending to TAP SGPS. That is why, when we went to Brussels, there were those who said that we could separate the two and take only TAP SA to Brussels, and Brussels did not go along with that. Because TAP SGPS owed €800 million to TAP SA. So, if TAP SGPS went bankrupt, TAP SA would be in a complicated situation. We are talking about a debt owed by TAP SGPS on behalf of M&E Brasil.
And Groundforce, is it almost sold?
Groundforce is different. It is under insolvency administration and will enter a recovery plan. There are several interested parties, they are known and they have been making proposals. It is a process that is being managed by the insolvency administrators.
Are the interested parties the same ones that have been in the past?
Yes, for the most part. I don’t know if more have appeared in the meantime, either with Montepio or with us.
Will the sale take place in the coming months?
It is in the next few months. There’s no reason why it shouldn’t be. Groundforce is a viable company. It was unlucky to have this pandemic and to have a shareholder without the financial capacity to bail out the company.
TAP had a shareholder who had no financial capacity. Groundforce had a shareholder who did not have the financial capacity…
This is a point that the country must learn for the future. When we talk about TAP’s sale, one thing is very clear to me: what happened in the past cannot happen with Groundforce or with TAP. What the PSD did with TAP and Groundforce must be a lesson for us in the future. It is one thing to want to privatise, but another to sell to the first that comes along. That is a mistake no private businessman makes. We sold TAP to a creative man, a great aviation entrepreneur, but without the financial capacity to capitalise a company like TAP. With Groundforce it was even more serious. Whoever bought it ended up never spending any money. They made money without ever having invested a cent. And this is something that revolts us all. But even more serious is the failure to provide the necessary conditions and suitability for the company to grow and develop. This is why, if TAP is ever sold, it must be integrated into a solid, consistent group with financial capacity.