18.5.2022
EN
Official Journal of the European Union
L 139/43
(143) While the observations of EAA point towards a certain projected fleet growth (which has not been disclosed to the Portuguese authorities as this constitutes confidential information of EAA), it is unlikely that EAA would reach a fleet size comparable to TAP Air Portugal’s.
Being a small-sized air carrier, without significant presence at Lisbon airport, the investments required for EAA to be in a position to replace TAP Air Portugal are substantial and extremely improbable to obtain in the near future.
Considering EAA’s focus on providing ACMI services to other carriers, including TAP Air Portugal, the Portuguese authorities note that a successful restructuring of TAP Air Portugal could potentially translate into additional service agreements between these two companies.
5.2.
Appropriateness of aid
(144) The Portuguese authorities have reiterated their conclusion that, in view of the previous situation of difficulty of TAP SGPS and the impact of the COVID-19 pandemic, State support in the form of equity provides a better financial structure for TAP SGPS to strengthen its balance sheet.
(145) In relation to the observations of Ryanair and EAA, the Portuguese authorities emphasise that, according to point 58 of the R&R Guidelines, Member States are free to choose the form of the restructuring aid.
In doing so, they are not required to conduct an exhaustive comparison of all available options.
They should assess the nature of the beneficiary’ difficulties and select appropriate instruments to deal with them.
Such an exercise was extensively conducted by the Portuguese authorities and submitted to the Commission for its assessment\.
The State aid measures notified by Portugal were construed to provide liquidity support to the implementation of the measures of the restructuring plan and address the negative equity position of TAP SGPS.
(146) In particular, TAP SGPS accumulated a negative shareholders’ equity of EUR [...] million between 2006 and 2015, mainly due to [...].
Considering the weight of the airline business on the revenues of TAP SGPS, [...].
With regards to TAP Air Portugal, even though the airline had been on a growth trajectory in operational terms, due to the launch of a transformation process, TAP Air Portugal had not yet been able to considerably reduce its costs when comparing with competitors, and it consistently presented lower profitability driven by lower efficiency and extraordinary costs.
(147) Furthermore, TAP Air Portugal’s transformation process was interrupted as a result of the global pandemic of COVID-19 and the economic crisis that followed, which resulted in an acute liquidity crisis leading to the granting of rescue aid by the Portuguese authorities, in 2020.
Already in late 2020, the liquidity analysis Air Portugal clearly indicated that without further State support, TAP Air Portugal would reach a substantial negative net cash position in 2021 and 2022 in the absence of a market recovery.
(148) As capital markets have not been available for airline borrowers like TAP SGPS, resorting to State funding was the only available option in 2020.
TAP SGPS‘s management has [...].
However, debt funding markets were largely shut down for airlines following the onset of the COVID-19 pandemic with financial institutions in general drastically reducing theirs credit limits for the sector.
In order to maximize liquidity, TAP Air Portugal has made an effort to sell those aircraft that were owned by the company ([...]).
Other assets [...].
(149) Currently, prior to incremental State support and despite TAP SGPS’s efforts and discussions with financial institutions and other stakeholders, raising additional funds from private markets for TAP SGPS will not be possible under present conditions and definitely not before the approval of the restructuring plan.
This leaves the Portuguese State, who is also the main shareholder, as the only viable source of funding (or provider of a guarantee of funding) for the company.
(150) In this context, considering the unavailability of capital markets at this stage for TAP SGPS and the company’s equity and liquidity position, it is the Portuguese authorities’ conclusion that State support in the form of equity provides a better financial structure for TAP SGPS to strengthen its balance sheet.
Moreover, combined with the implementation of the measures set forth in the restructuring plan (namely those regarding fleet, network and cost restructuring), the State aid is expected to facilitate TAP SGPS or TAP Air Portugal’s ‘s access to the capital markets during the period from [...].