Portugal's Secretary of State for Transport Sergio Monteiro said the privatisation of TAP Portugal would be relaunched once favourable market conditions exist (Jornal de Negocios/Dinheiro Vivo, 22-May-2013). Mr Monteiro said, "Market conditions are what will determine when we will begin the process, because what we want is to finish in a way different from what eventually happened in the previous [attempt]." Mr Monteiro estimates that 2H2013 is when the process will be relaunched, stressing however this is an estimate and it might happen before or afterward, in 2014. Mr Monteiro said the International Monetary Fund, European Central Bank and European Commission understood the reasons for cancelling the previous attempt to privatise the flag carrier, as privatisation of state enterprises is a condition of the state receiving bailout funds. Meanwhile, Economy Minister Alvaro Santos Pereira said it was "important" that the Government's privatisation of assets such as TAP be partly achieved through capital markets (Reuters, 22-May-2013). As previously reported by CAPA, Portugal's Council of Ministers rejected the sole bid received in the Government's previous attempt to privatise the carrier in Dec-2012 due to insufficient financial guarantees.
TAP privatisation to be relaunched once market conditions are favourable: Transport Minister
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Both Finnair and TAP are based in peripheral corners of Europe: Finnair in the extreme northeast and TAP in the southwest. Both are based in countries with relatively small populations, but they have developed networks that capitalise on their geographic location to carry connecting traffic from across Europe and elsewhere to long haul destinations in other continents.
TAP's main long haul market is Upper South America (primarily Brazil), but it also has a secondary long haul niche in Africa. Finnair's main long haul market is Northeast Asia, with an additional presence in South and Southeast Asia. Both also operate to the US. On short haul, LCC competition has been a bigger threat to TAP than to Finnair, but cost savings are important to both.
TAP and Finnair have similar traffic volumes, unit costs and average trip lengths. Moreover, both have struggled to generate sustainable profitability. This report compares and contrasts Europe's two leading independent exponents of the location based long haul niche strategy. Both are set to accelerate their long haul growth.
TAP Portugal transforms under new owners to tap potential; at forefront of narrowbody long haul
A period of restructuring following investment by new shareholders in TAP Portugal in Nov-2015 has led to a resurgent airline. It returned to profit in 2016 after two years of losses and enjoyed a surge in passenger numbers in 4Q2016.
The investment by the Atlantic Gateway Consortium, which HNA Group will formally join in 1H2017, provided funds for fleet expansion. TAP's orders include A321neoLR aircraft, giving it the potential to open new long haul routes not possible with widebodies.
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