TAP Air Portugal Faces Red Numbers
TAP Air Portugal which is currently undergoing a restructuring plan set up by the EU and with the initial goal of generating a net profit by 2025, faced losses amounting to €71.9 million in the initial quarter of 2024. This loss follows a negative outcome of €26.2 million in the final quarter of 2023, largely attributed to personnel costs.
The airline is currently restructuring under a Brussels-approved 3.2-billion euro rescue plan which includes downsizing its fleet, cutting thousands of jobs and reducing the wages of most workers. Under the plan, TAP aimed to achieve positive operating results in 2023 and a net annual profit in 2025.
Reuters, March 2023
Loses Are Increasing In Short Term
Compared to the same period last year, there was a 25.2% increase in losses, amounting to a larger loss of €14.5 million. However, in comparison to the first quarter of 2019, there was an improvement of €34.7 million.
Rising Costs But Savings On Fuel
Conversely, recurring operational costs reached €905.2 million, marking a 7% increase from the first three months of 2023. This increase is mainly attributed to rising personnel costs, up by €70.5 million (or 56.9%), due to new company agreements, offset by reduced fuel costs (down by €23.6 million or 8.5%) owing to lower jet fuel prices.
TAP explains the rise in personnel costs. This increase resulted from two factors: a one-time expense due to an agreement with pilot representatives, and pay cuts implemented in 2023 that were later reversed in the second half of the year.
TAP Generates More Revenue
The airline, which has recently been voted among one of the world’s safest airlines, has reached an operational revenue of €862 million, a 3.1% increase compared to the same period last year. The rise was primarily driven by passenger segment revenues, which increased by 5%.
The Occupancy Rate Is Rising
The company reported a recurring EBITDA (Earnings before interest, tax, depreciation, and amortization) of €83.7 million. Despite operating 2% fewer flights, there was a 0.6% increase in passenger numbers compared to the same period last year- When compared to pre-pandemic levels in 2019, passenger numbers reached 104%, while operated flights reached 90%. Thus the occupancy rate is rising.
From: Obervador.pt
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