TAP Air Portugal Reports Record $192 Million Profit In 2023

TAP Air Portugal, despite a privatization effort that has rocked back and forth during the year, has managed to achieve a record-breaking net profit result, surpassing the net income it earned in 2017. Looking forward, the airline will focus on sustainable profits by improving its various organizational processes.

Record-breaking result

TAP Air Portugal ended 2023 with a net profit of €177.3 million ($191.9 million), surpassing the net income result it posted in 2017. Compared to a year prior, the carrier’s profits grew by €111.7 million ($120.9 million), with the company’s revenues growing to €4.2 billion ($4.5 billion).

Speaking about the results, Luís Rodrigues, the chief executive officer (CEO) of TAP Air Portugal, stated that the year’s results affirmed the airline’s recovery path in recent years. The executive noted that its record revenues, robust and resilient operating margins, and a clear deleveraging trend have confirmed its financial strength.

“An increase in punctuality and regularity in the second half of the year, as well as in the NPS, underscores the organizational focus on delivering a better service to our passengers. Signing the new collective labour agreements confirms the recognition and commitment towards our people.”

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Expecting a challenging 2024

However, Rodrigues noted that 2024 will be a challenging year, which will test the organization’s focus. As such, the CEO said that TAP Air Portugal will need the commitment of all of its employees to enable the Portuguese carrier to establish itself as one of the most attractive companies in the industry.

Photo: Wirestock Creators | Shutterstock

Meanwhile, the airline’s outlook said that the primary goal for the upcoming financial year is to execute its strategic roadmap, which would allow TAP Air Portugal to remain profitable in the long run. The carrier added that it will look to improve its operations, invest in its people and customers, strengthen its focus on key markets, and capitalize on its strong results while also managing costs, improving cash flow, and continuing deleveraging.

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Turbulent privatization process

The airline ended the year with a fleet of 98 aircraft, split between 19 regional jets (12 Embraer E190 and seven E195s), 22 widebody aircraft (three Airbus A330ceo, 19 A330neo), and 57 single-aisle jets, split between five Airbus A319ceo, 15 A320ceo, three A321ceo, 11 A320neo, ten A321neo, and 13 A321LR.

TAP Air Portugal’s total liabilities, including non-current and current, went down to €5.8 billion ($6.2 billion), compared to €5.9 billion ($6.3 billion) a year prior. However, while at the end of 2022, it had €916.1 million ($991.9 million) of cash in hand, the carrier ended 2023 with €789.4 million ($854.7 million) of cash.

Photo: TAP Air Portugal

Nevertheless, one of the most important developments of the year was the privatization process of the airline. While the Portuguese government initiated a sale of a 51% stake in the airline in September 2023 after a scandal within the government, which resulted in snap elections on March 10, 2024, the process has stalled.

According to the Portuguese outlet Publico, Rodrigues was adamant that despite the political crisis rocking the then-incumbent government, foreign investors, including other airline groups, have remained interested in the stake that was on the market.

However, a potential deal would have to be approved by the European Commission (EC), which has become more rigorous when reviewing mergers. While the EC approved the Korean Air-Asiana Airlines merger with certain conditions, it has already informed Lufthansa and the Italian government that it objected to the Lufthansa–ITA Airways merger, citing competition concerns on routes from/to Italy.

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