Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Portugal airline TAP’s profit drops on forex losses, higher wage costs

by Uma Rajagopal
0 comments
2024 11 18T120850Z 1 LYNXMPEKAH0FA RTROPTP 4 TAP M A PRIVATISATION AIR FRANCE KLM

LISBON (Reuters) – Portugal’s flag carrier TAP reported a 35% slump in third-quarter net profit on Monday to 118 million euros ($124 million), hurt by foreign exchange losses and a big jump in wage costs.

Operating costs rose 6.5% at the airline, which is slated for privatisation, to 1.05 billion euros. That was driven by a 26% surge in wage costs after the reversal of pay cuts imposed under a tough restructuring plan following a pandemic-induced bailout.

The airline’s operating income rose 2% to 1.284 billion euros on a 0.5% increase in passenger revenues. Passenger numbers rose 1.3% to around 4.6 million in the quarter and TAP said bookings for the fourth quarter were slightly higher than a year ago.

Chief Executive Luis Rodrigues said management was pleased with the performance, “despite the two major challenges we faced: the difficult situation of managing European airspace, and significant currency devaluations.”

TAP’s recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 4.8% to 372 million euros and its EBITDA margin – a measure of profitability – fell to 29% from 31% a year ago.

Portugal’s new centre-right government plans to resume TAP’s privatisation in 2025 and said it had received interest from over a dozen potential buyers, including Lufthansa, Air France-KLM and British Airways owner IAG.

($1 = 0.9465 euros)

 

(Reporting by Patrícia Vicente Rua; Editing by Andrei Khalip and Bernadette Baum)