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RTP knows that this morning, by videoconference with the workers, the TAP management has been presenting the general lines of the restructuring plan that will be taken to Brussels.
The top management of the company is aware that the airline is going through the greatest crisis in its history and that it affects all airlines in the world. Likewise, data indicates that TAP is underperforming its counterparts such as Iberia or Air France.
And in recent years, also in countercycling with several European airlines, The company had an increase in labor costs, both due to the increase in workers and the increase in the wage bill.
The restructuring plan was developed taking into account IATA’s projections for the recovery of air traffic for the next few years. The International Air Transport Association believes that demand will only be identical to that of 2019 in the year 2024.
The restructuring plan, as far as RTP is concerned, is even more conservative and aims for 2025.
The strong breakouts felt this year will continue to have a similar effect next. In 2021, TAP’s operation will be almost half of that registered in 2019.
The company is confident that medium-haul operations will recover faster, in particular starting in 2022. But the long-term is expected to take longer to recover.
According to the restructuring plan, the aircraft fleet will be reduced to 88. And even so, the use of these devices will be below the levels considered normal until at least 2025.
The plan is being presented by the Government in Brussels. The European Commission has two requirements for approval. A balanced operating result for 2023. And that by 2025 the company will be able to generate money to start paying the debt.
To do this, the airline will resize the fleet, for these 88 aircraft, optimize operating costs and bet on revenue growth.
Part of the financial recovery will be achieved by negotiating the reduction of the fleet and the reduction of costs with the company’s suppliers. But that is not enough. TAP management knows that without adjustments in labor costs it will never be possible to align with the requirements of the European Commission. Therefore, an adjustment of the wage bill of 250 to 300 million euros per year will be necessary.
RTP knows that the reduction of personnel will be done, in a first phase, through mutually agreed leave, part-time work agreements and even long-term unpaid leave. Layoffs will be the next step.
The management maintains that it is necessary to improve productivity, adjusting TAP to the new reality, that of a company with a substantially reduced operation.
Therefore, it will apply a 25 percent reduction in the workers’ wage bill, with a minimum amount that will not be cut.
This morning, the digital newspaper ECO said that The plan also includes the injection of 3,000 million euros by 2024.
