A major stake in TAP Air Portugal could be sold to the likes of Lufthansa, Air France or the owner of British Airways following a series of disappointing results at the Portuguese flag carrier according to local media reports. The founder of jetBlue and Brazil’s Azul Airlines is rumoured to already had had discussions with potential investors and may sell his stake in TAP Air Portugal by the end of March 2020.
David Neeleman, who also helped found Canada’s WestJet, became a co-investor in TAP Air Portugal in 2015 as part of the Atlantic Gateway Consortium alongside Humberto Pedrosa and Aigle Azur. At present, Atlantic Gateway owns a 45 per cent stake in TAP, with a majority 50 per cent stake owned by the Portuguese government and the remaining stake owned by the airline’s employees.
Neeleman has embarked on an ambitious expansion and fleet-renewal strategy at the struggling Lisbon-based airline that has seen TAP take delivery fo 30 brand new aircraft in less than 12-months. The carrier has been replacing its fleet so quickly that the average age of its aircraft has dropped from 15-years old to just 3.9 years in just over a year.
The plan has been to take advantage of Lisbon’s location on the very westerly edge of Europe to connect the continent with North and South America, making use of fuel-efficient aircraft like Airbus A321 long-range jets and A330neo’s.
But TAP Air Portugal’s financial performance is continuing to suffer. According to the Jornal de Negocios financial paper, the Portuguese government has tired of the losses and believes the poor results are becoming a burden on tax-payers. Earlier this year, government officials reprimanded TAP Air Portugal for paying out huge bonuses to senior executives despite the fact the airline had posted a multi-million Euro loss.
Those losses have continued and in the first nine months of this year, the airline reported a loss of €119 million. TAP Air Portugal claimed the results reflected similar declines at other European flag-carriers and said civil aviation was experiencing a decline throughout the Continent.
Jornal de Negocios claims Neeleman has already had discussions with Lufthansa, Air France and IAG. If the rumours are to be believed, then Atlantic Gateway would look to sell its stake in TAP Air Portugal within the first three months of 2019.
However, Neeleman says he is “increasingly excited about TAP’s future,” although admits that “the results for shareholders have not been as fast as we would have liked.”
While not directly addressing the rumours, Neeleman said in a personal statement last week that “speculation and other manoeuvres do nothing to help this extraordinary project so relevant to Portugal.”
“We all must assume this responsibility,” the statement concluded.
Government officials have said they do not know of any impending ownership change at TAP but have also said that business negotiations are private and cannot be commented on.