In the 80s, a friend from Porto played with a railroad slogan that stated that “CP does not walk, it flies”. In the pronunciation of the North, said the playful friend, the phrase was another: “CP is not doing well.” In the case of TAP, currently, two things can be said, it doesn't fly (a lot) and it doesn't do well either.
TAP's situation is no joke, of course, and unfortunately it is not new either. We knew from the beginning of the Covid-19 pandemic that the airline would probably be one of the big Portuguese companies, the one that would suffer the most.
The nature of the containment measures immediately dictated this. Airports turned into parking lots, with aircraft glued to the ground, represented a nightmare for any airline: not being able to fly.
TAP is not alone. The impact was felt by the entire sector globally. Around the world, companies were forced to ask for state aid to try to survive. Some, such as Flybe, South African and Avianca, failed and landed in bankruptcy. The hearing of the Minister of Infrastructure, Pedro Nuno Santos, who returned to Parliament this week, served mainly for the Government to remind us that TAP is not out of risk, that it may have to declare insolvency.
TAP's problems predate Covid-19. The company was renewing its fleet and routes, but was caught by delays in delivering the planes. Back to his losses, he made the mistake of offering a series of workers with big prizes. Reactions to this episode already signaled that relations between the three main shareholders - the state and the two private parties - were weakened.
The shareholder solution created for TAP with privatization and reversal would always produce what the British call odd bedfellows, uncomfortable partners.
Now, after the losses and the prospect of even greater losses, with the lay-offs and the spectrum of thousands of redundancies, with the probable reduction of the fleet and routes, all in the shadow of a debt of 3,3 billion, the comadres will have to understand each other.
The State has every right to impose conditions to help, including a degree of control, intervention in the strategic plan and presence on the executive committee. But it also has an obligation to keep the promise that the minister made - to be cautious and reasonable in imposing these conditions. This may start by helping private shareholders to be able to follow a capital increase, for example by transforming the credits they owe to the company.
The other is to not delay in creating the solution, otherwise TAP falls into the hole dug by the pandemic and previous problems.
TAP is not perfect, but it is important for the country. Understand each other and don't force us to Take Another Plane.