The European Commission has approved a €1.2 billion rescue loan destined for TAP Air Portugal.
On June 9th, 2020, Portugal informed the European Commission that it intended to provide financial support for TAP following which, the European Commission granted the airline six months to either pay back the loan or submit a restructuring plan. The company was known to have been in financial difficulties prior to the coronavirus crisis. Its debt totals an estimated €800 million.
The European Commission notes that the latest move allows it to indirectly support the Portuguese tourism industry.
The latest announcement, however, makes no note of environmental concerns. Over the last few years TAP Air Portugal has been renewing its fleet and therefore reducing its environmental footprint with the use of more modern aircraft.
The European Commission approval of the loan was meant to address the carrier’s immediate liquidity requirements and long-term viability.
This €1.2 billion Portuguese rescue aid will help TAP Air Portugal face its liquidity needs and pave the way for its restructuring to ensure its long-term viability. In a sector that has been hit particularly hard by the coronavirus outbreak, the measure will help avoiding disruptions for passengers.Margrethe Vestager, Executive Vice President in charge of competition policy
“With the progressive lifting of travel restrictions and the upcoming touristic season, it also indirectly benefits the Portuguese tourism sector and economy as a whole. We continue working closely with Member States to find solutions to support companies in these difficult times in line with EU rules.”
TAP Air Portugal has, similarly to many other airlines, been preparing for a return to regular passenger operations in an attempt to take advantage of what remains of this year’s summer season.
Over the last couple of months, TAP has operated a number of cargo flights as well as repatriation services. The airline has been offering cargo flights between China and Portugal, as well as humanitarian services from destinations such as Mozambique and Peru.