It was already known that the airline business has had a difficult year, but the losses of the TAP group last year were much higher, reaching 85.1 million euros. The value contained in the report and company accounts, which shows an increase of 79.2 million compared to losses in 2013. On the eve of privatization, debt also rose to 1062 million and negative equity sank to 512 million.
Of the 85.1 million loss suffered in 2014, a substantial share attributable to TAP SA, the group’s arm for aviation. Last year, the airline lost $ 46.4 million, after the generated profits of 34 million just a year earlier. The slippage was justified by extraordinary factors, such as problems in the summer, strikes and the fall in the average tariff, made it impossible to absorb fully the gains from devaluation of oil.
But the air transport results do not justify, in itself, the worsening of the group’s losses: also the maintenance unit which TAP acquired in 2005 in Brazil is still far from the expected level. In 2014, the M & E recorded losses of 22.6 million euros, which still meant an improvement over the 41 million the previous year. In the annual report, TAP writes that after the restructuring launched four years ago, “we continued to improve the economic and operational performance of the company, with visible signs of sustainability.”
On the other hand, the management of Aeropar holdings, which is owned by TAP group and holds 47.6% of the M & E Brazil, had losses of 11 million, against 19.5 million recorded in 2013. In Groundforce, the handling operator in the TAP has a 49.9% (with the majority of the capital in the hands of Urban), there was profit, 2.4 million (300 thousand euros above the value achieved in the same period). In the PGA, the regional airline that is part of the group, the year was losses of around one million euros (after 2013 have achieved a gain of 5.2 million).
Fruit losses, TAP again worsen in 2014 their equity (resulting from the difference between the active and passive), ending the year with a negative value of 511.9 million. This is a significant increase over the previous year, in which the negative equity stood at 373.3 million. Also the financial debt continued an upward movement, reaching 1.0617 billion euros to 31 December, representing an increase of about 11 million compared to 2013. But the biggest problem, as shown by the annual report, is that there has been “a relevant substitution values in debt of medium and long term by shorter-term operations”, which puts greater pressure on the treasury.
These figures are known about one month deadline for submission of Tenders by TAP, as potential candidates have to make binding offers by 15 May. The Government intends to sell 66% of the company by the end of the first half, and is currently encounter with a trial of strength with the pilots, which may also result in a new strike.
In the report and accounts, the administration of TAP, led by Fernando Pinto, assumes that “in 2014 several factors have revealed the necessity to rethink the long-term strategy” group. And so it was defined a new plan for the period between 2015 and 2020, based on six main areas.
The first concerns the “renovation and expansion of all fleets”, with the aim to “maintain the competitive advantage of relatively low unit costs.” With regard to the business model, the idea is to “always match those of current industry standards,” including “provide increased passenger comfort.” In a third axis, related to improving the customer experience, the administration signed up as a goal “to promote the product distinction and service offered, given the operators low cost .”
Fourth, the TAP puts aim “continued growth effort of the network and increase the focus on the Lisbon hub operations,” steeling “the position in the markets where it currently operates” and at the same time coming “in markets high potential and which has had a lower presence. “
As for efficiency, the administration states that” will develop a greater effort to optimize the structure so costs to ensure a basis for growth. ” And lastly, there is a sixth axis dedicated to the “repositioning” of maintenance and engineering units in Portugal and Brazil. For the first, the strategy is to “continued focus on serving the TAP fleet in conjunction with an increase in market uptake of effort services for others. “For Brazil, it is intended to” consolidate the results “of the restructuring program and” relaunch the business in its various fronts. “
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