TAP Air Portugal has reported its financial results for the third quarter of 2023 this Tuesday (24). In the period, the airline registered a net profit of EUR180.5 million which, over EUR1.258 billion in revenues, made for a net margin of 14.3%.
The figures compare to a net profit of EUR111.3 million over revenues of EUR1.118 billion (9.9% net margin) in the same period of 2022, in what is generally the busiest quarter for air travel in Europe, as it includes the peak of the Summer season.
A 12.5% increase in operational revenues, compared to a growth in operational costs of 1.5%, drove TAP’s financial improvement. Fuel expenses, the airline’s highest stream of cost, decreased by 23.2% in the comparison with the same quarter of 2022, despite an increase of 7.1% in block hours.
«The third quarter results are encouraging and validate the organization’s focus on executing a good Summer to our passengers», stated TAP’s CEO, Luís Rodrigues, in the earnings release.
«We are taking solid steps towards improving the robustness of our operation and the quality of the service we give our passengers, improving the recovery of two previous, difficult years. The significant improvement in revenues, supported by resilient operational margins and a strong deleveraging path, prove the group’s financial solidity in a challenging context».
Of note is TAP’s worsening cargo revenues, in line with the cooling of air freight yields globally. This segment registered a 40.8% drop between the third quarter of 2022 and the same period in 2023 — albeit at EUR38 million in revenue, it composes only a small fraction of the group’s business. In the aggregate of the year up to September, that drop from 2022 to 2023 has been of 33.6%.
The announcement comes as the Portuguese government advances in the privatization process of TAP Air Portugal, which the three legacy airline groups in Europe (Air France-KLM, IAG and Lufthansa) are reportedly interested in.
«The results are frankly encouraging and show that after a 2022 with historic results, 2023 [will seemingly] be even better and these, obviously, are good perspectives for the privatization», said João Galamba, Portugal’s Minister of Infrastructure, according to Diário de Notícias newspaper.
«This means that we have a solid, growing and sustainable company, which is always good news». Galamba was in Cascais Airport, to the West of Lisbon, signing the start of procedures for the migration of executive jets operations from Lisbon’s Portela Airport.
Such a measure, according to Expresso, would free up some 20 slots from highly-constrained Portela, which is TAP’s hub.
