TAP Air Portugal recorded a $1.74 billion annual loss in 2021, the airline’s chief executive announced at a press conference on April 11, 2022.
TAP said that the loss was partly caused by the closure of its aircraft maintenance subsidiary in Brazil, which represents a loss of more than $1.1 billion. The European Commission required the airline to close the maintenance business under a Brussels-approved $3.4 billion rescue plan.
Following terms of rescue plan, which was approved in December 2021, the airline was also forced to reduce its fleet size, cut more than 2,900 jobs and significantly reduce wages.
In addition, external factors, including COVID-19 uncertainty, also harmed the airline’s operational capabilities in 2021.
In 2021, TAP Air Portugal flew more than 5.8 million passengers, which was a 25% increase in passenger numbers when compared to 2020. However, the recent result represents just 34% of pre-pandemic demand recorded in 2019.
The airline’s CEO Christine Ourmières-Widener said that rising inflation and the increasing cost of aircraft fuel could also create other obstacles for the airline in the future.
To deal with the upcoming financial challenges, the carrier will need to “continue to perform in line” with its restructuring plan, Ourmières-Widener said.