Thursday, 7 May 2015

TAP's Future in Doubt

Portugal's troubled airline TAP will face a massive consolidation, cutting staff and routes if the ongoing 10 day strike by air crew hamper the carriers planned privatisation the Prime Minister Pedro Passos Coelho said yesterday.

Pilots at the Portuguese airline commenced their strike action on 1st May, which the airline claims has reduced scheduled flights by over 30 per cent.

The strike comes just before a May 15 deadline for bids to buy a majority stake in what is now a wholly state-owned company. The government has said it will go ahead with the privatisation despite the strike.

"If the privatisation does not succeed, today we know what the alternative is: a restructuring which can only be based on big lay-offs, route reductions, reduction of equipment and thereby a reduction of the operation and significance of the company," Passos Coelho told parliament.

"That is, transforming TAP into a mini TAP, which is not in the interests of workers, the economy nor the Portuguese," he said.

European Union state-aid rules prevent the Portuguese government from injecting more funds into the troubled airline. TAP has estimated that the pilots strike could cost 70 million euros, the airline already has debts of over 1 billion euros.