On Tuesday, December 21, the European Commission (EC) announced that it has approved under European Union (EU) state aid rules:
(i) €2.55 billion in restructuring aid to enable the return to the viability of the Transportes Aéreos Portugueses SGPS S.A. group and the airline TAP Air Portugal; and
(ii) €107.1 million in aid to compensate TAP Air Portugal for losses suffered, as a result of the coronavirus pandemic, between July 1, 2020, and December 30, 2020.
Executive Vice President Margrethe Vestager, in charge of competition policy, said the approved measures will allow Portugal to compensate TAP for losses incurred directly as a result of travel restrictions implemented to limit the spread of the coronavirus. At the same time, the approved plan for TAP’s restructuring will ensure the airline’s long-term viability.
«The substantial public aid will have certain checks and balances in place to limit distortions of competition. TAP has in particular committed to providing slots at Lisbon airport, a congested airport where it has substantial market power. This gives competing airlines the possibility to expand their activities at this airport, ensuring fair prices and more choice for European consumers,» Vestager said.
The approval of the contribution is justified, according to the EC, because TAP Air Portugal, a Portuguese state-owned company, is the largest airline based in Portugal, an important provider of both passenger and cargo transport services, not only in continental Portugal but also in the autonomous regions of Madeira and the Azores, as well as for Portuguese-speaking countries and diaspora communities.
The company plays a key role in the growth of tourism in Portugal and the Portuguese economy as a whole and is a major employer in Portugal. In 2019, it represented more than 50% of arrivals and departures at Lisbon International Airport.
