Engineering boost helps TAP counter Brazilian currency hit in second quarter

Privatisation target TAP Air Portugal boosted its recurring operating profit in the second quarter, although its net performance was dragged down by the currency challenges in its key Brazilian market. The Portuguese carrier increased its recurring EBIT earnings by 16% to E183m ($204m) for the three months ending 30 June 2024. Revenues were 3% higher in the second quarter at E1.1b, driven both by higher passenger activity – reflecting 2% more capacity and load factor up more than a point to 82.7% – as well as by a jump of E30m in revenues to E72m from its maintenance business. But TAP net profit was down E8m at E72m in the second quarter, largely reflecting foreign exchange losses amid the depreciation of the Brazilian real. The airline has a strong presence in Brazil, which will be further increased to 15 routes with the re-opening of its Manaus flights and a new service to Florianopolis. TAP overcame first-quarter losses, posting a net profit of E0.4m for the first half, including an E18m foriegn-exchange loss. CE Luis Rodrigues says: “In the second quarter of 2024, we continued the necessary path of structural transformation of TAP. Special mention goes to the maintenance and engineering area, which is beginning to realise its potential. The strong performance in the second quarter allows for a positive net result in the semester which, despite being reduced, is achieved for the second consecutive time, but now without salary cuts. We continue on the path we set out to follow, with the commitment of our people and the support of our stakeholders: to establish TAP as a sustainably profitable company and one of the most attractive in the industry.”<br/>