Fernando Pinto, the former head of Brazilian flag-carrier Varig, has been greeted with a baptism of fire at TAP Air Portugal where he has been appointed new chief executive. Strikes have once again crippled the airline, including action in December, and unions continue to press their claim for salary rises.
Pinto has remained calm, promising to reveal a new strategic plan for the Portuguese flag carrier. Although details are still under wraps, it is known that the plan will look carefully at the whole area of aircraft maintenance.
Crucial to TAP's success is clearance from the European Union (EU) of the SAir Group's proposed 34% equity stake, which will inject a much needed Es31 billion ($137 million) in new capital. TAP is expected to run up losses of Es20 billion for the year, with negative cash-flow a major headache. Indeed, company vice-president P José Queiroz recently warned that TAP was already having to use credit to pay salaries.
A decision by the EU is promised shortly, but there are problems over whether the deal creates a monopoly on routes which link Lisbon with both Brussels and Zurich.
There has been criticism that Pinto had been forced on TAP by its strategic partner, the SAirGroup, but he was definitely chosen "by the government" emphasises transport minister Jorge Coelho.
The unions have been particularly critical of the appointment. They argue that Pinto was dismissed by Varig because of the losses that were run up during his four years in charge. "Is it thought that with these qualifications he can revive TAP?" they ask.
Source: Airline Business
