Portuguese airline TAP narrows losses as passenger numbers recover

Portuguese airline TAP more than halved Q1 net losses to 57.4m euros ($63.19m) as passenger numbers surpassed pre-pandemic levels, it said late on Wednesday. The state-owned carrier’s recovery in the quarter is likely to boost hopes for its planned privatisation as early as July. Reuters last month reported that Lufthansa, Air France-KLM and British Airways owner IAG were laying the groundwork for potential bids. TAP Passenger numbers rose 67% year on year to 3.51m between January and March, “exceeding pre-crisis levels in the first quarter of 2019”, TAP reported. Total operating revenue in the three months increased by 70.4% from a year earlier to E835.9m while passenger revenue grew by 79% to E737.6m. The increased revenues were offset by higher labour and fuel costs. TAP said total operating costs rose 54% to E852.2m, with fuel expenses doubling to E277m and labour costs rising 53% to E123.8m. CE Luis Rodrigues said that TAP delivered “a strong operational and financial performance, despite the increase in costs and operational challenges”. The airline is under a Brussels-approved rescue plan worth E3.2b. The plan includes a downsizing of TAP’s fleet, cutting thousands of jobs and reducing wages for most workers. Its recurring earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 63% to E120m, while its EBITDA margin - a key measure of profitability - declined 0.7 percentage points to 14.4%, the company said.<br/>