[ad_1]
There is an unprecedented crisis in the aviation sector, but “TAP has additional problems”, because it already had “inefficiencies” and “competitive disadvantages before the pandemic”, compared to competitors, the other flagship companies, such as Iberia or Lufthansa . . The diagnosis was made this Friday morning by the Minister of Infrastructure, Pedro Nuno Santos, at a press conference on TAP, in which he stressed that personnel costs are linked to this issue.
“The situation is not the responsibility of the workers, but obviously labor costs are a burden for TAP that make recovery difficult,” said the minister responsible for the company, noting that these characteristics “were accentuated during private management.” . TAP has, on average, he said, 19% more pilots per aircraft than its competitors, and 28% more at the cabin crew level.
“We have company agreements that have consequences for the cost structure at TAP. They are rights conquered, we do not say that they are not fair, but they have a weight in the cost structure that makes the company less competitive, “he added, giving the example that pilots” earn more than in Iberia. ” The cost adjustment, he said, is necessary for the survival of the company, and it is estimated that the accumulated losses of income will reach up to 6.7 billion euros in 2025. “With a loss of income of this dimension,” said the minister. , it is necessary to reduce the size of the company to reduce public support and have a company more adjusted to reality.
The plan, he said, was made under a scenario “slightly more conservative than the baseline scenario of IATA”, the world association of the airline sector, in order, he justified, to have “security in what we are doing and reduce the risk of negative surprises “.
Regarding the financing needs, the outlook is about 2,100 million in public guarantees until 2024 to help the company borrow money from banks, of which about 1,000 million next year, to which the loan of 1,200 million this year (which, totally or partially, can be converted into share capital). However, in a more aggressive scenario, the total amount of support, explained today, could go from 3,300 million euros to 3,700 million (increasing guarantees to 2,500 million). In this scenario, the guarantees for TAP in 2021, the year in which it is guaranteed that the carrier will need support, go from 970 million to 1164 million euros.
Present at the press conference, the Secretary of State for Finance, Miguel Cruz, said that the expectation is that in 2025 the demand will return to the levels of 2019, which would give TAP revenues “in excess of three billion euros” . That year, although “marginally”, the company should begin to pay the debt incurred. Before, in 2024, TAP should already have “positive net results”.
The operational balance, he said, will be reached in 2022 or 2023, having added that these goals are “important for the credibility of the restructuring plan” and for the image with the markets, allowing its financing. The granting of guarantees is “associated with the fulfillment of the objectives of the plan”, in order to “aim at the sustainability of the company in the medium term”. The plan also includes the sale of the engineering business in Brazil, one of the sources of the group’s losses in the past and which has recently been restructured.
Strong reduction in personnel costs
TAP’s restructuring plan, delivered this Thursday by the Government in Brussels, contemplates a cut in personnel costs of 230 million euros next year, thus remaining between this amount and 325 million (this compared to a scenario without such measures) . The data is contained in a presentation of the company plan.
This objective will be achieved in two ways: the departure of workers, voluntary or not, and a transversal cut of 25% of the salary of those who stay. In the latter case, as the company reported this Thursday night, it was established that the minimum amount above which the salary reduction will be incurred will be 900 euros, “considering the base salary for this purpose.”
This cut, said this Friday Minister Pedro Nuno Santos, will be progressive. For example, in a salary of 1,500 euros the cut is about 600 euros above the 900 limit, and in a salary of 2,000 euros it is about 1,100 euros, with a greater decrease the higher the salary.
Regarding the reduction in the number of 2,000 permanent workers (750 cabin crew, 750 land crew and 500 pilots), the minister stressed today that this is the “upper limit”, that first there is a program of voluntary redundancies and reduced hours. promising to “work with the unions” to try to reduce that number. He also affirmed that it is the 25% reduction in wages that makes the job cuts not greater.
“We have identified a number of workers who are not strictly necessary for the operation. We are talking about people, with families, who are the first to be affected, but what we are doing is essential for the company to continue to exist and to recover part of the work that unfortunately it cannot maintain at this time ”, highlighted Pedro. Nuno Santos.
At the end of 2019, the group employed 10,952 people, 9006 of which in TAP, SA. In between, there are already a large number of contracts without renewal (1600 this year). In 2019, the amount of personnel expenses was 751.9 million euros, of which 678.6 million corresponded to TAP, SA (the airline had an increase of 11.7% in this item, compared to 2018, very due to new hires).
The resizing also implies a reduction and change of aircraft, with the minister confirming that the goal is to reach 88 aircraft, when this year the maximum of 108 aircraft was reached. However, the plan contemplates a new promotion, reaching 101 aircraft in 2025. Asked about impacts on the Porto operations, “the minister affirmed that there is” no intention to penalize our operation from Porto, on the contrary. “
“The commitment to TAP Express will at least make viable a set of operations from Porto that are not viable if carried out by TAP. We will increase our capacity to serve the North region directly from the Sá Carneiro Airport. It will depend on demand and we want TAP, at the service of our economy, not to be a drag on state budgets, “added Pedro Nuno Santos.
Unions react
The Civil Aviation Pilots Union (SPAC), through a press conference held this afternoon, through its president, Alfredo Mendonça, stated: “there are several people, such as the Minister of Infrastructure, who have been passing on some data that they are not correct and we have a way to prove it ”.
This, according to this official quoted by Lusa, causes “a lot of damage to the class and its future.” “There is a great campaign of disinformation regarding the pilots and undermining the dignity of the pilots. We got to the point where the human and labor dignity of the pilots began to be attacked ”, said Alfredo Mendonça.
The National Union of Civil Aviation Flight Personnel (SNPVAC), for its part, issued a statement, following the minister’s statements, in which he assures that the restructuring plan has been “made known to the stations, setbacks, with vague measures and in which imposition is the watchword ”. And he asks Pedro Nuno Santos to present “the figures on which he based his statements.”
“The Minister of Infrastructure said that labor costs are a drag on TAP and that they prevent it from being competitive. It’s the easy way and the catchy phrase which this plan holds well for the public, ”says SNPVAC management. This union says that it “vehemently repudiates” the suspension of the company contract, adding that “in recent years the cabin crew have been living with the sword of the termination of the company contract which now appears to be subject to imposition.”
“The management teams pass and the workers are left to suffer bad decisions taken since they are asked to pay the costs of the loot,” accuses the SNPVAC, urging the Government to include in the voluntary adhesion package an early and early retirement pension -Reforms that “will have made it possible to strongly mitigate the negative social impact of the layoffs that the company claims to want to implement.” For this union, “today the starting gun was fired for a marathon that will continue for the next few months.”
To the PUBLIC, an official source of the European Commission said that the plan presented will now be analyzed. The Commission, he said, maintains “close and constructive contacts” with the Portuguese authorities, but, for the time being, cannot anticipate either the date on which a decision will be taken or its significance.
Neeleman left with 169 million less
At the beginning of the press conference, the minister began by providing a framework of public aid – a loan of 1.2 billion euros just this year – stating, without mentioning his name, that David Neeleman, a former private shareholder, “had no money , neither will it ”to invest money in TAP.
“There was no bravado against the private companies,” he said, saying that without the reinforcement of the State the company would fail. He affirmed that Neeleman would be entitled to complementary payments of 224 million, for which, having received 55 million from the State for his position of 22.5%, “he agreed to lose 169 million euros.”
The minister recalled that TAP was considered a company in crisis as early as 2019, before the pandemic, so it could not join the European support timeframe to help contain the effects of covid-19. “It is not a matter of opinion, it is the application of objective criteria provided by law,” he said. This was due to the negative equity, more than 600 million and the level and debts in arrears of more than 90 days, which made the creditors “request the insolvency of the company.”
On the other hand, he argued that “nothing would change” if the plan were carried out with European aid to Covid-19, and that competing companies are not doing a more fluid restructuring. Lufthansa, he said, “will cut 19,000 workers”, equivalent to 20% of the total workforce, “and 45% of the salaries of the pilots and 20% of the crew.” With Miguel Dantas
