Portuguese airline TAP narrows losses as passenger numbers recover

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LISBON, May 11 (Reuters) – Portuguese airline TAP more than halved first-quarter net losses to 57.4 million euros ($63.19 million) as passenger numbers surpassed pre-pandemic levels, it said late on Wednesday.

The state-owned carrier’s recovery in the quarter is likely to boost hopes for its planned privatisation as early as July.

Reuters last month reported that Lufthansa , Air France-KLM and British Airways owner IAG were laying the groundwork for potential bids.

TAP Passenger numbers rose 67% year on year to 3.51 million between January and March, “exceeding pre-crisis levels in the first quarter of 2019”, TAP reported.

Total operating revenue in the three months increased by 70.4% from a year earlier to 835.9 million euros while passenger revenue grew by 79% to 737.6 million euros.

The increased revenues were offset by higher labour and fuel costs.

TAP said total operating costs rose 54% to 852.2 million euros, with fuel expenses doubling to 277 million euros and labour costs rising 53% to 123.8 million euros.

Chief Executive Luis Rodrigues said that TAP delivered “a strong operational and financial performance, despite the increase in costs and operational challenges”.

The airline is under a Brussels-approved rescue plan worth 3.2 billion euros. The plan includes a downsizing of TAP’s fleet, cutting thousands of jobs and reducing wages for most workers.

Its recurring earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 63% to 120 million euros, while its EBITDA margin – a key measure of profitability – declined 0.7 percentage points to 14.4%, the company said.

Last week,the government asked state holding company Parpublica to pick two independent assessors to value TAP ahead of its privatisation.

($1 = 0.9084 euros)

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