[Anonymous]

[transtraxman]

The Portuguese government is going to sell a 66% stake in its national airline. Offers must be in by 15 May 2015.

“LATAM Airlines Rules Itself Out Of TAP Sale”
Airwise/Reuters 28-4-15

http://news.airwise.com/story/view/1430266826.html

………………but will there be an airline to sell?

“Portugal Appeals To TAP Pilots On Eve Of Strike”
Airwise/Reuters 30-4-15

http://news.airwise.com/story/view/1430404939.html

…….the conditions extracted from the government by the unions certainly do not make the airline an attractive proposition – even before the strike!! But a 10 day strike might tip TAP over the edge of the precipice into bankrupcy.

“TAP Pilot Strike Effect Limited So Far”
Airwise/Reuters 1-5-15

http://news.airwise.com/story/view/1430530003.html

…………the fact that 75% of scheduled flights took off this morning tends to make one think that the pilots are not so militant as originally assumed to be.

It would be a pity to lose this airline, but if it did fail what would happen afterwards?

[transtraxman]

“PM Says TAP Faces Cuts If Sell Off Fails”,
Airwise / Reuters 6-5-15
TAP says the strike has affected about 30% of flights.

http://news.airwise.com/story/view/1430958550.html

[LuganoPirate]

The big question is who will buy them? The only really valuable destinations they have are Angola, Mozambique, and many smaller towns in South America. Bearing in mind the experience of Swissair with Sabena, I can’t see LH/LX being interested, though they would be a natural choice as TAP is part of *A.

The most likely in my opinion will be Etihad or maybe another of the ME3?

[ImissConcorde]

If the situation with Aer Lingus drags on much longer might IAG have another look?

http://www.businesstraveller.com/news/iag-to-buy-tap-portugal

[transtraxman]

I tend to think that IAG will not make a move for TAP. It could prove a difficult mouthful to digest as the European authorities might well think there could not be such a dominance to South America(Brazil) from the Iberian peninsula by IAG with Iberia.
On the other hand Air Europa might be an option to merge with TAP. It would suit both – and Skyteam.
The third option is for TAM to take over TAP. The Brazilian airline would thus have access to the European market to a greater extent than through oneworld.

[transtraxman]

“TAP Portugal pilots end 10-day strike”
AIR TRANSPORT WORLD (11-5-15)

http://atwonline.com/labor/tap-portugal-pilots-end-10-day-strike

TAP(and Portugalia) was able to operate about 70% of the programmed flights but as a result lost about €70 million. This comes just before the 15th May deadline to receive offers for the privatization of the airline.

In 2014 TAP lost €46 million after a net profit of €34 million in 2013.

If the sale does not go through then substantial downsizing is seen as the only alternative.

“PM Says TAP Faces Cuts If Sell Off Fails”,
Airwise/Reuters 6-5-15.

http://news.airwise.com/story/view/1430958550.html

TAP is seen as an attractive target because of its extensive African and Brazilian route networks.

What next?

[LuganoPirate]

Not forgetting that any non EU airline will only be allowed to buy 49% of TAP.

[transtraxman]

“Portugal Gets Three Bids For TAP”.
Airwise/Reuters 15-5-15

http://news.airwise.com/story/view/1431737745.html

2 Brazilians and one Portuguese seem to be the bidders.
One of the Brazilians is “David Neeleman, the founder of US airline JetBlue and chief executive of Azul Brazilian Airlines.”
The other is “German Efromovich… (who) controls Latin America’s Avianca.”
The Portuguese seems to be “Miguel Pais do Amaral, who has .. made a bid via his private holding company, Quifel.”

“Portuguese media have also reported that American investment funds Apollo and Cerberus could be part of an offer.” Here no indication is given if this is a seperate bid or will form part of one of the other offers.

Whatever, but we come up against the EU rules that state no foreign (non-EU) purchase can be made of more than 49% of the company. I cannot see how that squares with the Brazilian or American bids …… or is an exception going to be made this time.

“The government, ….wants the sale to be sealed by the end of June.(But)… is retaining a 34 percent stake that can be sold in two years.”

[Flightlevel]

TAP must be the last airline in the EU to defy the reality of LCC’s and Avianca or Azul would be a perfect partner to grow their airline & TAP too. If the government sells its shares in 2 years & half the airline goes public the buyer now would have ‘de facto’ control to expand their EU market.

[icenspice]

Initial decision by the Portuguese Government expected on May 28.

According to Público, Freshfields law firm has been called in to study Neeleman’s bid. Efromovich has a Polish passport.

[transtraxman]

“Portugal To Challenge Court’s Suspension Of TAP Sale”,
Airwise/Reuters 3-6-15

http://news.airwise.com/story/view/1433377392.html

The Portuguese government does not accept the limitations put on it by the court. The court action has been brought by a citizens’ association, which opposes the sale, obviously just a spoiler. Others against the sale are union and worker groups.

Tomorrow, Friday 5th june will be the final date for bids to purchase 61% of TAP to be binding. The two interested parties in the purchase are Brazilian based David Neeleman, founder of US airline JetBlue, and German Efromovich, who controls Latin America’s Avianca.

[icenspice]

Thanks for update transtraxman

Efromovich has just submitted a new bid, minutes before the deadline. There will be a press conference at 18:00….I suppose that is BST.

Edited: as has Neeleman.

[transtraxman]

“Bidders Make Improved Offers For TAP”,
Airwise / Reuters 5-6-15

http://news.airwise.com/story/view/1433568960.html

“…..the state property holding company Parpublica now had five days to analyse them(the offers) before the government decides which, if any, is acceptable.”

“One consortium is led by Brazilian-Colombian investor German Efromovich, who controls Latin America’s Avianca via his holding company Synergy.”

“The rival consortium is a holding company including American-Brazilian investor David Neeleman and Portuguese bus company owner Humberto Pedrosa. Neeleman is the chief executive of Azul Brazilian Airlines and founder of US airline JetBlue.said fleet renewal was an important part of his consortium’s offer.”…….”We will buy 53 new and technologically advanced aircraft,” he said in the statement.

So we will will see a rife-rafe from here to the end of the month when the Portuguese government has to make a decision. I bet on the second option as no foreigner can have more than 49% of an European airline.

[transtraxman]

If one is still wondering about the importance of this transaction then they should look at the geo-political-turistic-economic picture.

1-TAP´s entry into Latin America but principally Brazil makes it a very appertising morsal for any European operator – which these days means the Lufthansa group (Star Alliance), Air France-KLM (Skyteam) or IAG (oneworld). Etihad , with its Partner Alliance might be interested which would then make it a major player.

2-The second possibility is for an an American or Brazilian group to be interested.
David Neeleman is the founder of US airline JetBlue and chief executive of Azul Brazilian Airlines.
The other is “German Efromovich… (who) controls Latin America’s Avianca.
In either case TAP´s European networks would be at the service of the Americans whether it be in one alliance or another.

Whatever, happens it will decide the direction that TAP takes. Thus it will influence other participants in the Portuguese market. i.e Will TAP just go for long-haul, medium-haul and the important domestic connections? or what?

It all makes for, at least, an interesting situation which could change the flying map of Europe.

[Author]

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