Brazilian airline Azul SA agreed with the Portuguese government to sell its stake in the Portuguese airline TAP. This information comes after the European government announced is taking a more meaningful stake in TAP. Let’s investigate further.
David Neeleman is out, so is Blue
Yesterday, American businessman David Neeleman withdrew his stake in TAP Air Portugal. Neeleman originally owned, through its Atlantic Gateway consortium, a 45% stake in TAP. Before the agreement, the Portuguese government had a 50% stake, and the carrier’s employees the remaining 5%.
As we know, David Neeleman is also the founder of the Brazilian low-cost airline Azul.
Azul sold its indirect 6% stake in TAP. This stake was worth approximately $ 12.15 million, the carrier said in a statement seen by Simple Flying. Furthermore, the Brazilian airline will not exercise the right to convert bonds worth 90 million euros into shares.
In the first quarter of 2020, Azul’s TAP investment value decreased to $ 937 million due to Covid-19.
John Rodgerson, CEO of Azul, said:
Like many other airlines around the world, TAP has been severely affected by the Covid-19 crisis. With the help provided by the Portuguese government, we can guarantee the continuation of TAP, thus guaranteeing the integrity of our link. “
In the first quarter of 2020, TAP lost $ 443 million.
Portugal thanks David Neeleman
The Portuguese government toyed with the idea of the nationalization of TAP. In the end, the government and the carrier’s shareholders agreed on a different strategy. As reported yesterday, Neeleman sold his stake in TAP for $ 62 million and will remain part of the company until its bonds mature. After that, your investment will be returned to you and you will no longer operate as a stakeholder.
The Portuguese Minister of Infrastructure, Pedro Nuno Santos, recently thanked David Neeleman for everything he did at TAP Portugal. As reported by the Portuguese Portuguese State Agencyadded
“It is undeniable: David Neeleman’s entry into TAP was important to the carrier. I don’t want to be unfair to an interested party who knows a lot about the industry. It is successful worldwide and has contributed a lot to this airline. ”
Neeleman joined TAP in 2015. At that time, he paid almost $ 400 million and surpassed the Colombian businessman and former owner of Avianca, German Efromovich, for TAP. During his tenure, TAP renewed his fleet. In 2019 alone, the carrier received 30 new aircraft.
Blue is close to a merger?
Returning to Brazil, Azul Linhas Aereas is also in an unstable situation. A few weeks ago, Azul signed a code share agreement with longtime rival LATAM Brasil.
The agreement includes 50 non-overlapping national routes to / from Brasilia, Belo Horizonte, Recife, Porto-Alegre, Campinas, Curitiba and Sao Paulo.
In July, Azul expects to operate up to 240 daily flights, compared to the 168 daily departures it had in June. In addition, Azul is adding six national destinations, with a total of 66 cities served. Before the pandemic, Azul operated 950 daily departures.
However, prospects in Latin America remain bleak. Three major airlines in the region have filed for Chapter 11 bankruptcy in the U.S., and more likely will continue. According to regional specialists, GOL Linhas Aereas and Azul may be the next airlines to follow in the footsteps of LATAM, Avianca and Aeroméxico. It is not impossible to say that Azul may also consider a merger in the future, despite the fact that both LATAM Brasil and Azul deny any merger talk.
Do you expect to see a merger soon? Let us know in the comments.
