Portuguese American Journal

Business: TAP Air Portugal to be sold before the end of the year – Portugal

For the second time in two years, Portugal is considering selling TAP Air Portugal. Government sources have said that the re-launch of the airline’s privatization should occur before the end of 2014, “when market conditions are conducive to the success of the operation.”

As reported Thursday, by the Wall Street Journal (WSJ), “Portugal’s government said it had received several expressions of interest” in buying the state run airline.

Portugal’s Transport Secretary, Sergio Monteiro, cited by the WSJ, said the Portuguese government “would sell up to 66% of the company—61% through direct sales to one or more investors and the rest to its 7,500 employees.”

Although no further details were offered by the WSJ about “potential buyers or price,” Portugal’s Economy Minister, Antonio Pires de Lima, said recently that interested parties include Airline Avianca as well as airlines Air Europa and Azul Airlines.

In 2012, Portugal withdrew from completing the privatization of TAP Air Portugal, citing a lack of bank guarantees as the reason to reject sole bidder Brazil’s Synergy Aerospace. Other airlines named as potential candidates included Delta Airlines, Virgin, Lufthansa and IAG (British Airway and Iberia).

TAP’s privatization is part of the of the €78 billion financial bailout signed by Portugal in 2011 with the European Commission, the International Monetary Fund and the European Central Bank.

Accordingly, in 2015 Portugal also intends to privatize the rail cargo company, CP Carga, and related maintenance company Empresa de Manutenção e Equipamento Ferroviário (EMEF). In mid-2015 the government will complete the privatization of Empresa General de Fomento (EGF), a sub-holding company of water group ADP (Águas de Portugal).

TAP Air Portugal is Portugal’s national flag carrier, operating in the United States from Newark (NJ) and Miami (FL). Strikes are being staged for November 30/ December 2, by TAP Air Portugal Cabin Crew Union (SNPVAC) as the Portuguese government prepares to sell the state-owned airline.