TAP-Air Portugal pilots begin 10-day strike

Δημοσιεύθηκε: 1 Μαΐου 2015 - 08:30

Pilots in dispute over plans to privatise TAP-Air Portugal began a 10-day strike on Friday in a protest that the government and unions warn could destroy the debt-laden national airline.

The stoppage, which could affect more than 2,700 flights and 300,000 passengers, is due to end days before a May 15 deadline for investors to submit binding offers for TAP in Lisbon's second attempt to sell off the struggling airline in two years.

Trade union leaders representing about 500 pilots ignored last-minute appeals from Pedro Passos Coelho, Portugal's prime minister, and others to call off the stoppage that TAP said could cause €70m in direct losses. Overall losses to the economy including tourism are estimated at more than €300m.

The pilots' union is pressing for 10-20 per cent of TAP's capital to be set aside for employees in the privatisation, against 5 per cent being offered by the government, The pilots, who say the government has reneged on previous agreements, are also seeking payment of seniority bonuses frozen since 2011.

Other workers at TAP, which has more than 6,000 employees and is a member of the Star Alliance of 26 carriers, have demonstrated against the stoppage.

Carlos Silva, head of the UGT trade union federation, said the strike was "a step towards the abyss and the destruction of the company".

Citigroup has declined to comment on reports that it will advise on the sale of TAP to one or more buyers, who will have to take on more than €1bn in liabilities and agree to inject new capital into the airline.

The bank was previously an adviser in the 2012 sale of ANA, Portugal's airports operator, to Vinci, the French construction company.

Portugal agreed with its international bailout lenders to sell off TAP as part of a privatisation programme that has raised €8bn since 2011, exceeding an initial target of €5.5bn.

The plan is to sell 66 per cent of the group in a first phase, of which 5 per cent will go to employees, and the remaining 34 per cent within the following two years.

The prime minister has warned that a failure to privatise TAP could lead to massive job losses and oblige taxpayers to recapitalise the national carrier.

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>"If we leave everything as it is, TAP will disappear," he told parliament. The alternatives, he said, were privatisation or "a profound restructuring with heavy lay-offs" that would probably not save the company in the long term.

TAP's Latin American routes, particularly to Brazil, are its biggest selling point. But a heavily lossmaking maintenance operation in Brazil is also seen as its greatest weakness.

Miguel Pais do Amaral, a Portuguese businessman, is only potential bidder to have publicly declared an interest in the second attempt to sell TAP. The Brazilian airline, Azul, has also been tipped to be in the running.

Lisbon shelved a previous attempt to privatise TAP two years ago. A total of 13 buyers expressed an interest in the group, which at the time analysts valued at a maximum of €500m. But 12 potential investors, including Europe's three biggest carriers, Air France-KLM Group, Lufthansa and IAG, the parent of British Airways, eventually pulled out of the running.

The only firm offer came from Synergy group, headed by German Efromovich, a Brazilian investor who owns Avianca, one of Latin America's biggest airlines. Lisbon rejected the bid because of dissatisfaction with the financial guarantees offered. Mr Efromovich could again be in the running to buy TAP, according to Lisbon media reports.

TAP posted losses of €85.1m in 2014 compared with a loss of €5.9m in 2013. In recent years, the airline's biggest losses have stemmed from TAP M & E Brasil, a maintenance unit the airline acquired in 2005 from Varig, a now defunct Brazilian airline. This unit posted a loss of €22.6m last year compared with a €41m loss in 2013.

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