Portuguese government regains control of TAP
Entrepreneur David Neeleman sold his stake in the airline and left the company. Company will receive government aid of 1.2 billion euros
TAP airline will again be controlled by the Portuguese government. The airline will now hold 72.5% of its shares in the hands of the state thanks to a closed agreement with businessman David Neeleman on Thursday which will sell its share, currently 22.5%.
Thanks to the payment of 55 million euros, the founder of JetBlue and Azul airlines will leave the company. His partner, Humberto Pedrosa, however, will remain with his participation (also 22.5%) while TAP employees have 5% of the shares.
According to Portugal’s finance minister, João Leão, the deal will prevent the airline’s collapse by paving the way for the approval of a state loan of 1.2 billion euros. These funds were blocked by the European Commission because Neeleman conditioned any withdrawal to the payment of a loan made by Azul to TAP.
The agreement also meant avoiding a litigious exit since the Portuguese government’s original objective was to nationalize TAP. Although it still needs to be ratified, the sale of the shares will motivate the immediate departure of the CEO of the Portuguese company, Antonoaldo Neves, who was already in charge of Azul.
According to the Minister of Infrastructure, Pedro Nuno Santos, the current president must leave the position because it was not a choice of the state after all, with “the departure of one of the main shareholders, it was difficult to explain that the CEO continued” at the head of the company.
Although it now has the vast majority of TAP’s shares, the government of Portugal intends to hire a company to manage the airline. What is certain is that TAP will shrink in the coming months. Among the conditions in Brussels to approve the loan is a downsizing of the company that should result in a reduction in fleet, destinations and number of employees.
It is not yet known how the airline will operate in its main markets. Under private management, TAP expanded its services and modernized its fleet with more efficient aircraft such as the A321neo and A330-900neo jets. In addition, Neeleman made partnership agreements with Azul to lease Embraer aircraft to TAP.[DISPLAY_ULTIMATE_SOCIAL_ICONS]