Support Skift’s Independent JournalismMake a Contribution Now
David Neeleman, founder of Azul Linhas Aereas Brasileiras SA, Brazil’s third-biggest airline, said he submitted a binding offer for TAP SGPS SA as the Portuguese government tries to offload the state-owned airline for the second time in less than three years.
“There’s a lot of interest in making sure TAP is successful,” Neeleman said in a telephone interview Friday after submitting his bid.
German Efromovich, owner of South America’s Avianca Holdings SA airline brands, and Portuguese investor Miguel Pais do Amaral also submitted bids for the Lisbon-based airline, business daily Diario Economico reported today, without saying how it obtained the information.
The government wants to sell as much as 66 percent of the company — 61 percent through a direct sale to one or more investors and the rest to the airline’s 13,000 employees. TAP’s chief attraction is its 77 weekly flights from Portugal to Brazil, though the company also offers almost the same number of services to Africa and operates 43 routes within Europe.
“We will work really closely with Azul and trade passengers,” said Neeleman. “That’s really where the power comes from, when you can create a network and feed from each other.”
Portugal agreed in 2011 to sell TAP as a condition of receiving aid from the International Monetary Fund and European Union. The Portuguese government rejected an offer from Efromovich in 2012, citing lack of financial conditions provided by the Latin American investor.
The sale of TAP will enable the debt-laden airline to receive a capital injection to bolster its operations and renovate its fleet, Portuguese Prime Minister Pedro Passos Coelho said on March 13. A series of strikes, including a 10-day pilot protest earlier this month, will “surely” weigh on the offers the airline receives, he said.
TAP, whose business includes a maintenance unit in Brazil and the airline itself, posted a loss of 85.1 million euros ($97 million) in 2014 compared with a 5.9 million-euro loss in the previous year. It had 1.06 billion euros of debt at the end of last year.
Neeleman, who is bidding for TAP with Portuguese bus company Barraqueiro, said that while he planned to provide “a lot of capital” for TAP, the airline’s debt needed to be renegotiated. “The banks have got to play ball, everybody’s got to work together,” he said.
The government expects to announce a buyer for the airline by the end of June.
To contact the reporters on this story: Christiana Sciaudone in Sao Paulo at firstname.lastname@example.org; Henrique Almeida in Lisbon at email@example.com To contact the editors responsible for this story: Jerrold Colten at firstname.lastname@example.org Robert Valpuesta, Jim Silver
This article was written by Christiana Sciaudone and Henrique Almeida from Bloomberg and was legally licensed through the NewsCred publisher network.