Having had their offer accepted back in June this year, the Atlantic Gateway consortium led by JetBlue Airways and Azul Brazilian Airlines founder David Neeleman, together with Portuguese bus company Barranquiro Group, have been given the go ahead by the Portuguese anti-trust regulator Autoridade da ConcorrĂȘncia (AdC) to acquire a 61% stake in TAP Portugal, the countryâs national airline. The deal is based on a purchase price of âŹ10.00m while the consortium will also inject a minimum of âŹ338m into the debt-ridden airline, as well as supplying it with 53 aircraft. The consortium has also guaranteed to keep the airlineâs hub in Lisbon for at least 30 years.
The Portuguese government had agreed to sell a controlling stake in the airline as part of a privatization programme aimed at reducing the countryâs debt and which had been agreed with its international bailout lenders. At the time of the deal agreement analysts were questioning whether the purchase of a controlling stake in TAP by investors led by Mr Neeleman could be challenged by the EU, owing to a restriction in the ownership of European airlines by non-EU investors which limits any holding to 49% of voting shares. SĂ©rgio Monteiro, Portugalâs Secretary of State for Transport however felt that there were âno significant risks.â
In 2014 TAP posted net losses of âŹ85.1m. Much of the airlines more recent losses have come as a result of poor performance from TAP M&E Brasil, a maintenance unit the airline acquired in 2005 from Varig, a now deceased Brazilian airline. This unit posted a loss of âŹ22.6m last year after posting a âŹ41m loss in 2013. The airline itself operated at a loss of âŹ85.1m in 2014, compared with a âŹ5.9m loss the previous year. At the end of 2014 the airline had âŹ1.06bn of debt. The current deal also includes the sale of 5% of TAP to employees.
Axccording to AdC it âdecided to clear the merger as it considered that the notified transaction would not create significant impediments to effective competition on the identified relevant markets, since none of the acquiring parties are active on the same air routes currently operated by TAP, nor was the risk of elimination of potential competition on the routes to Brazil identified.â A TAP Portugal spokeswoman indicated that the deal now depended on approval by the Portuguese civil aviation authority ANAC, and though a date for a decision to be given was unclear, it was believed it would be soon. (US$1.00 = âŹ0.89 at time of publication.)
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