Portuguese airline TAP swings to profit earlier than expected

Portuguese airline TAP swung to a profit in 2022, earlier than expected in its restructuring plan, as rising revenue and lower staff costs offset soaring fuel prices, the state-owned company said on Tuesday. TAP said it made a net profit of E65.6m in 2022 compared with a net loss of E1.6b a year earlier, when it was feeling the effects of the pandemic. In 2022, TAP flew 13.8m passengers, up from 5.8m a year earlier and about 81% of pre-pandemic levels. The airline is currently restructuring under a Brussels-approved E3.2b 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. TAP's operating revenue jumped to E3.5b in 2022 from E1.39b a year earlier. Recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) of E777.7m compared with a negative E999m in 2021. "During the first full year of the restructuring plan, TAP generated an operating profit that is an all-time record for the company," outgoing CEO Christine Ourmieres-Widener said. The company managed to be profitable even though fuel costs more than tripled in 2022 from the previous year to E1b. The government has said it was considering an outright or partial sale of the airline, with Lufthansa, Air France-KLM and British Airways owner IAG seen as potential buyers.<br/>