Portugal airline TAP's profit drops on forex losses, higher wage costs

Portugal's flag carrier TAP reported a 35% slump in third-quarter net profit on Monday to E118m, hurt by foreign exchange losses and a big jump in wage costs. Operating costs rose 6.5% at the airline, which is slated for privatisation, to E1.05b. That was driven by a 26% surge in wage costs after the reversal of pay cuts imposed under a tough restructuring plan following a pandemic-induced bailout. The airline's operating income rose 2% to E1.284b on a 0.5% increase in passenger revenues. Passenger numbers rose 1.3% to around 4.6m in the quarter and TAP said bookings for the fourth quarter were slightly higher than a year ago. CE Luis Rodrigues said management was pleased with the performance, "despite the two major challenges we faced: the difficult situation of managing European airspace, and significant currency devaluations." TAP's recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 4.8% to E372m and its EBITDA margin - a measure of profitability - fell to 29% from 31% a year ago. Portugal's new centre-right government plans to resume TAP's privatisation in 2025 and said it had received interest from over a dozen potential buyers, including Lufthansa, Air France-KLM and British Airways owner IAG.<br/>