Privatisation target TAP Air Portugal boosted its recurring operating profit in the second quarter, although its net performance was dragged down by the currency challenges in its key Brazilian market.
The Portuguese carrier increased its recurring EBIT earnings by 16% to €183 million ($204 million) for the three months ending 30 June 2024.
Revenues were 3% higher in the second quarter at €1.1 billion, driven both by higher passenger activity – reflecting 2% more capacity and load factor up more than a point to 82.7% – as well as by a jump of €30 million in revenues to €72 million from its maintenance business.
But TAP net profit was down €8 million at €72 million in the second quarter, largely reflecting foreign exchange losses amid the depreciation of the Brazilian real. The airline has a strong presence in Brazil, which will be further increased to 15 routes with the re-opening of its Manaus flights and a new service to Florianopolis.
TAP overcame first-quarter losses, posting a net profit of €0.4 million for the first half, including an €18 million foriegn-exchange loss.
Chief executive Luis Rodrigues says: “In the second quarter of 2024, we continued the necessary path of structural transformation of TAP. Special mention goes to the maintenance and engineering area, which is beginning to realise its potential.
“The strong performance in the second quarter allows for a positive net result in the semester which, despite being reduced, is achieved for the second consecutive time, but now without salary cuts.
“We continue on the path we set out to follow, with the commitment of our people and the support of our stakeholders: to establish TAP as a sustainably profitable company and one of the most attractive in the industry.”
While Portugal’s government cleared the path for the privatisation of TAP last year, it did not formally launch the process before a new government took office earlier this year. The new government has indicated it plans to go ahead with the privatisation.
”We are clearly aware that the market is there for it and we are hurrying to do it,” new infrastructure minister Miguel Pinto Luz is reported to have told a parliamentary committed earlier this month.
