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TAP Portugal swings to 2009 profit

TAP Portugal recorded a 2009 net profit of €59 million ($79 million), a sweeping reversal from the €209 million deficit incurred in 2008, crediting its change in fortunes to declining fuel prices, cost-cutting measures, a “selective” capacity reduction and a commercial policy that allowed it to minimize the fall in revenue.

The carrier said in a statement that it had achieved a “quite remarkable result which allows TAP to reposition again on the path to. . .profit” following the “exception” in 2008. Operating revenue in 2009 fell 11% to €1.92 billion but operating profit was €65 million compared to an operating loss of €156 million in 2008. Passengers carried declined 3.4% to 8.44 million, still its second-highest total ever.

Parent TAP Group remained slightly in the red with a loss of €3.5 million, narrowed from a €285 million deficit in 2008, mainly owing to the negative impact of buying back shares in Groundforce. It decided last year to regain full control of the ground handling company to improve its service levels, Executive Chairman and CEO Fernando Pinto told this website in a recent interview in Lisbon. But TAP now is looking to divest Groundforce partially or totally following a December decision by Portugal’s competition authority that it is in breach of EU rules on third-party handling.

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