TAP Air Portugal SWOT: new ownership potential

For the first time in 2019 TAP Air Portugal entered the top 15 in CAPA's ranking of European airline groups by passengers. It carried 17.1 million passengers, up 8.2% year-on-year and double the number of 10 years earlier.

TAP's part-privatisation in 2015 has led to resurgent growth and investment in fleet renewal, including the acquisition of A321LR aircraft and the new route possibilities they bring. The leading airline in Portugal, an important leisure destination, TAP has natural strengths in Latin America and has also developed Africa and North America to give more balance to its long haul network.

However, the airline struggles to generate consistent profitability and faces increasing capacity constraint at its Lisbon hub, and there have been signs of discontent from David Neeleman, one of TAP's investors. If he sells out, further shareholder changes could result, possibly attracting interest from a major European airline. Meanwhile, TAP must continue to develop partnerships with Azul and JetBlue, two airlines with which Mr Neeleman also has strong connections.

This report considers TAP's strengths, weaknesses, opportunities and threats.