Sunday, May 26, 2024

TAP posts ‘record’ 2023 profit, gearing up for privatisation

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TAP Air Portugal achieved a ‘record’ profit of €177.3 million in 2023, almost three times the previous record of €65.6 million achieved in 2022.

The Portuguese carrier reported revenues of €4.2 billion at the end of 2023, an increase of 20.9 per cent on the previous year, largely driven by higher fares and improved load factors. Passenger business represents 91 per cent of the carrier’s total FY2023 revenues.

In financial statements released this week the carrier said it is looking to “transform into a structurally sustainable airline” ahead of the Portuguese government’s plans to sell-off a 51 per cent stake in the state-owned carrier.

European aviation giants like IAG, Air France-KLM and Lufthansa Group have all expressed interest in the airline after the privatisation process was formally announced last September.

The carrier’s lucrative South American network is reportedly of interest to potential buyers. This core market saw an 8 per cent year-on-year increase in yield in 2023 and a load factor of 85 per cent. Available seat kilometres (ASKs) for the region also saw a year-on-year increase of 20 per cent.

TAP carried a total of 15.9 million passengers throughout 2023, representing an increase of 15.2 per cent compared to 2022 and 93 per cent of 2019 levels.

Capacity and load factors surpassed pre-pandemic levels, with capacity increasing 14.9 per cent year-on-year to reach 101 per cent of 2019 levels. Load factor, meanwhile, increased by 0.8 percentage points year-on-year, reaching 80.8 per cent in 2023.

The total number of flights operated in 2023 increased by 11 per cent year-on-year, reaching 88 per cent of pre-crisis levels.

TAP CEO Luís Rodrigues said the “strong” 2023 result confirms the carrier’s recent recovery and, looking ahead, it will focus on “continuously improving operations”.

“An increase in punctuality and regularity in the second half of the year, as well as in the NPS, underscores the organisational focus on delivering a better service to our passengers,” he said.

“Signing new collective labour agreements confirms the recognition and commitment towards our people.”

In 2023, recurring EBITDA (earnings before interest, taxes, depreciation, and amortisation) reached €871.6 million, marking a 15 per cent increase on 2022, while recurring EBIT amounted to €385.8 million, €137.1 million more than the previous year.

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