Other European Frequent Flyer Programs - TAP [TP] privatisation thread

19th of Oct 2011 , a new timeline for the TP privatisation was announced (http://algarvedailynews.com/news/4861-tap-sale-delayed).
2nd of Aug 2012 government approves timeline and conditions. [PT link only (http://www.jornaldenegocios.pt/home.php?template=SHOWNEWS_V2&id=571605)]. Bids to be received by 7th of Nov
Potential buyers in the news:
Lufthansa, IAG, Turkish, Qatar, Avianca, LATAM (http://www.portugaldailyview.com/uncategorized/tap-air-portugal)

Center for aviation (http://centreforaviation.com/analysis/tap-portugals-privatisation-is-moving-slowly-while-interest-is-well-publicized-but-not-definite-78461) with a very good analysis as usual

Single bidder is the Synergy group (Avianca):
CAPA link (http://centreforaviation.com/analysis/tap-portugals-privatisation-enters-final-stage-with-avianca-taca-parent-emerging-as-only-bidder-85965)

Synergy submitted the final proposal to buy TP (http://centreforaviation.com/news/synergy-submits-eur15bn-final-bid-for-tap-portugal-15-lower-than-prior-non-binding-proposal-193297).
It's said to be around 1.5bio EUR. Government net profit from the operation is said to be around 20mio EUR.
Decision expected on the 20th of Dec.

DEC20 Today is D day for the sale of TAP. The government is supposed to accept or reject the offer from Synergy.

DEC20 Bid rejected by the government (http://www.bloomberg.com/news/2012-12-20/portugal-shelves-tap-airline-auction-after-rejecting-brazil-bid.html)
GBM

Yesterday, 10/19/2011 , a new timeline for the TP privatisation was announced (http://algarvedailynews.com/news/4861-tap-sale-delayed).
It is now expected to be completed by end Q2 2012.

Interested buyers:
IAG - IB/BA (http://www.irishtimes.com/newspaper/finance/2011/1015/1224305837914.html)
The govt preferred buyer:
LH (http://www.breakingtravelnews.com/news/article/portuguese-prime-minister-urges-lufthansa-to-consider-tap/)
Speculative buyers:
QR (http://www.flyertalk.com/forum/other-european-frequent-flyer-programs/1175579-qatar-aiways-tap.html)

I'll update this post as we get more developments.

Let's see where my 10k victoria miles are ending up. My wish - LH.

GBM

I guess who ever place the bid for TAP the miles still will be part of the staralliance program. Hope so!

IAG/BA will get it this time.

It is easy to see in future that Europe will have:

LH/OS/LX/SNBruselles/LOT as one group
AF/KL/OK/Alitalia as one group
BA/IB/TAP as one group
plus Ryan and/or EasyJet

Will become the top five airline groups of Europe. LH is already very big with OS/LX/SN plus possible LOT (assume BD have been dumped). AF/KL is concetrating on Alitalia. Thus IAG may get TAP as the prime choice.

I guess who ever place the bid for TAP the miles still will be part of the staralliance program. Hope so!

Only if an unaligned carrier buys TP. If IAG closes the deal, then TP will join OW. If AF/KL decides to get into the arena, and wins, then your miles will unfortunately become part of Skyteam.

It is easy to see in future that Europe will have:
.
.
BA/IB/TAP as one group
.
.


I can see IG-Meridiana as part of that group eventually.

I hope that LH will buy TP or at least that TP will remain in *A.

Some news that may impact the shelf life of LIS and the possibility to further grow the TP network at the home hub under a new owner.

LUSA the Portuguese news agency, reported yesterday that there is a work group setup to find a solution for the Easyjet expansion. (http://airlineroute.net/2011/10/28/u2-lis-apr12/)
That would take us back 3 years in time to the LIS+1 solution, using one of the military airfields around Lisbon Link [PT only] (http://aeiou.expresso.pt/aviacao-localizacao-de-nova-base-da-easyjet-recupera-solucao-portela--1-estudada-em-2007=f686285) for LCCs.
It appears to be coordinated with Easyjet as they were voicing this a couple of week ago.Link [PT only] (http://www.dn.pt/inicio/portugal/interior.aspx?content_id=2085765).

So with no funding for a new airport it appears LIS is here to stay, and finding a new home for EZ current 2mio pax/year would allow growth potential at the current airport.
TP to benefit? To be seen.

GBM

Lets hope Lufthansa gets TAP. I would be horrified with Iberia and TAP together. Of course eEtihad would be nice as well but I think thebest option is Lufthansa/ Star Alliance

So with no funding for a new airport it appears LIS is here to stay, and finding a new home for EZ current 2mio pax/year would allow growth potential at the current airport.

So what is the status of planning/implementation for the "new" LIS? After twenty-odd years following the ups and downs and U-turns, I've rather taken my eyes off the ball. Has it been cancelled definitively, or are we waiting patiently for an investor?

Alverca would make a brilliantly positioned base for easyJet. An airport with ready-made rail access! It's a concept I've pushed many times, but I'm told conflict for ATM would always rule it out.

Cascais International isn't feasible, so next on my list is Beja. Halfway-(ish) between Lisbon and the Algarve and handy for the Sines complexes.

So what is the status of planning/implementation for the "new" LIS? After twenty-odd years following the ups and downs and U-turns, I've rather taken my eyes off the ball. Has it been cancelled definitively, or are we waiting patiently for an investor?

The latest status seems to be waiting for an investor. The government hasn't thrown in the towel yet but no real solution for the lack of funds seems any closer.
[PT only (http://www.dn.pt/inicio/economia/interior.aspx?content_id=2041723&seccao=Dinheiro%20Vivo)] The Economy minister stated on Oct 7th "There is no financing or competitive environment currently to go ahead with the new airport "


Alverca would make a brilliantly positioned base for easyJet. An airport with ready-made rail access! It's a concept I've pushed many times, but I'm told conflict for ATM would always rule it out.

Cascais International isn't feasible, so next on my list is Beja. Halfway-(ish) between Lisbon and the Algarve and handy for the Sines complexes.

In the news the 3 airfields around Lisbon mentioned were:
Montijo (http://www.wikimapia.org/#lat=38.7136436&lon=-9.0304184&z=12&l=5&m=b) Just South, across the river from LIS.
Alverca (http://www.wikimapia.org/#lat=38.8848864&lon=-9.0280151&z=12&l=5&m=b) To the North, up river from LIS
Sintra (http://www.wikimapia.org/#lat=38.8311498&lon=-9.3373489&z=13&l=5&m=b) West of LIS, North of Cascais and Sintra

I agree that Alverca with the main Portuguese railway line right next to it would be a perfect fit.
But these decisions in Portugal usually end up defying logic to say the least.

Cascais (http://www.wikimapia.org/#lat=38.724827&lon=-9.355545&z=13&l=5&m=b) (where Netjets have their PJ's) was not in that shortlist.

Beja (http://www.wikimapia.org/#lat=38.0826895&lon=-7.9286957&z=11&l=5&m=b)
As per all the media reports it's a righteous white elephant.
Our beloved bmi operated charters (http://www.guardian.co.uk/travel/2011/may/21/portugal-alentejo-new-flights) during the summer season with a weekly Beja-LHR (22nd May to 16th Oct)
According to media reports (http://aeiou.expresso.pt/aeroporto-de-beja-movimentou-164-passageiros-em-3-meses=f678850) a whooping 164 pax boarded those planes in Beja from 22nd of May to 31st of July.
It seems not even Ryanair is interested.

GBM

I agree that Alverca with the main Portuguese railway line right next to it would be a perfect fit.
But these decisions in Portugal usually end up defying logic to say the least

I'd put my money on Montijo. There are far too many operational problems with Alverca (eg, LPAR's runway 04/22 cannot be used simultaneously with LPPT's 03/21 because of the lack of sufficient separation).

I'd put my money on Montijo. There are far too many operational problems with Alverca (eg, LPAR's runway 04/22 cannot be used simultaneously with LPPT's 03/21 because of the lack of sufficient separation).

IAN-UK mentions the same on Air Traffic constraints.
I think I read somewhere Montijo would be better as it could work as parallel runways.
But Alverca seems better suited for access.

GBM

TP to benefit? To be seen.

I'm not sure sending the present LCC operations at LIS to another place would free up much space or slots for further TAP's expansion. It would mostly only benefit the LCC's. What TAP really needs for expansion is a new airport.

Lets hope Lufthansa gets TAP. I would be horrified with Iberia and TAP together.

So its ok for LH to dominate Germany, Switzerland, Austria, and possibly Poland, but somehow its "horrifying" for IAG to dominate the Iberian peninsula?:rolleyes:

So it seems the topic of TP going private is in full swing (http://centreforaviation.com/analysis/tap-portugals-privatisation-is-moving-slowly-while-interest-is-well-publicized-but-not-definite-78461):
New deadline for bids 7th of November (http://www.portugaldailyview.com/uncategorized/tap-air-portugal) although the criteria according to the media is quite murky.
The government is said to have gone on a road show and the latest info is that 15 companies will receive the details for bidding [PT only (http://www.jornaldenegocios.pt/home.php?template=SHOWNEWS_V2&id=572167&pn=1)]
Among them: Lufthansa, IAG, Turkish, Qatar, LATAM and Avianca are all making the headlines on Portuguese newspapers of this past week as potential bidders.

GBM

As long as TAP remains in *A, it's all fine for me.

Leading Portuguese weekly newspaper Expresso (http://expresso.sapo.pt/a-primeira-pagina-do-expresso-economia=f748859)mentions VS and DL as being interested in TP.

GBM

LATAM seems to be a good dea Portugal is well on the way to becoming a province of Brasil, why not go with the flow and retain lusaphone links through the merger of the provincial and metropolitan flag carrier?

The first round of bids were due friday 14th. According to the WSJ Luthansa and IAG (http://online.wsj.com/article/BT-CO-20120917-709709.html)are out of the race.

And according to, Portuguese newspaper Publico, there were only 3 companies bidding, being Avianca one of them [PT link only (http://economia.publico.pt/Noticia/tap-atrai-apenas-tres-investidores-para-privatizacao-1563457)]

GBM

IAG/BA will get it this time.

I hope so, as I've got 230 miles going to waste in my TAP account :)

The first round of bids were due friday 14th. According to the WSJ Luthansa and IAG (http://online.wsj.com/article/BT-CO-20120917-709709.html)are out of the race.

And according to, Portuguese newspaper Publico, there were only 3 companies bidding, being Avianca one of them [PT link only (http://economia.publico.pt/Noticia/tap-atrai-apenas-tres-investidores-para-privatizacao-1563457)]

GBM

Avianca has announced that they are out of the race after all. Source: Diário Económico (http://economico.sapo.pt/noticias/avianca-sem-interesse-na-tap_152035.html), via Bloomberg.

Avianca has announced that they are out of the race after all. Source: Diário Económico (http://economico.sapo.pt/noticias/avianca-sem-interesse-na-tap_152035.html), via Bloomberg.

Gérman Efromovich, chairman of Avianca Taca, has now clarified that Avianca isn't running for the bid, but that the holding Synergy Group is actually one of the competitors.

Source: Jornal de Negócios (http://www.jornaldenegocios.pt/home.php?template=SHOWNEWS_V2&id=579363).

I hope so, as I've got 230 miles going to waste in my TAP account :)

Oh well it seems after BMi IAG is giving up on TAP!

I thnk everyone except brazil has given up on Portugal, and on TAP, let's just get on with the takeovers,,,

For those interested, and who can read Portuguese, the law that establishes the privatization procedure of TAP has been published today in the official journal: http://dre.pt/pdf1sdip/2012/09/18400/0533505338.pdf.

Gérman Efromovich, chairman of Avianca Taca, has now clarified that Avianca isn't running for the bid, but that the holding Synergy Group is actually one of the competitors.

Source: Jornal de Negócios (http://www.jornaldenegocios.pt/home.php?template=SHOWNEWS_V2&id=579363).

Leading weekly newspaper Expresso published an ambiguous piece where it stated German Efromovich offer as being the only eligible one. [PT only (http://expresso.sapo.pt/jorge-bleck-representa-efromovich-na-privatizacao-da-tap=f756713)]

GBM

Leading weekly newspaper Expresso published an ambiguous piece where it stated German Efromovich offer as being the only eligible one. [PT only (http://expresso.sapo.pt/jorge-bleck-representa-efromovich-na-privatizacao-da-tap=f756713)]

GBM

Reuters (http://www.reuters.com/article/2012/10/18/us-portugal-tap-idUSBRE89H0X520121018) confirms Avianca as the only bidder.

GBM

Single bidder is the Synergy group (Avianca):
CAPA link (http://centreforaviation.com/analysis/tap-portugals-privatisation-enters-final-stage-with-avianca-taca-parent-emerging-as-only-bidder-85965)

Let's see how quickly they can morph Victoria into Lifemiles

GBM

Let's see how quickly they can morph Victoria into Lifemiles

Very quickly, I hope. :) This could become the solution for the replacement of my SEN card with another *A Gold.
I have to re-qualify for SEN in 2013, and it's just not worth it anymore. I'll get almost the same advantages with *Gold. And Lifemiles looked interesting, but geographically not very convenient. (Victoria OTH is not even worth mentioning... :p)

Can't quite see how they could become a majority shareholder given the regulatory issues. Control over the airline would have to remain in European hands if TAP is not to lose traffic rights left, right and centre. I suspect that this might run for a while before a satisfactory solution is found.

Can't quite see how they could become a majority shareholder given the regulatory issues. Control over the airline would have to remain in European hands if TAP is not to lose traffic rights left, right and centre. I suspect that this might run for a while before a satisfactory solution is found.

From what I recall, Gérman Efromovich supposedly holds a polish passport (I think CAPA mentioned it). If that option isn't available, they could figure out something via a holding company. Avianca wouldn't have gone for this if they didn't already have a plan on how to address the shareholder issue.

From what I recall, Gérman Efromovich supposedly holds a polish passport (I think CAPA mentioned it). If that option isn't available, they could figure out something via a holding company. Avianca wouldn't have gone for this if they didn't already have a plan on how to address the shareholder issue.Don't under-estimate the problem. It would not be the first time that a merger/acquisition in the airline sector fails due to regulatory issues.

Don't under-estimate the problem. It would not be the first time that a merger/acquisition in the airline sector fails due to regulatory issues.

It is a significant hurdle but, again, I do not believe they are walking in blind, making it up as they go. If nothing else, the Portugese government thinks there's a way for this to be done.

Synergy submitted the final proposal to buy TP.
It's said to be around 1.5bio EUR. Government net profit from the operation is said to be around 20mio EUR.
Decision expected on the 20th of Dec.
Government is desperately looking to raise money to comply with Troika (EU/ECB/IMF) Bailout conditions.
This will be a tough one. Sell and make no money but clean the debt of TP. Not selling and lose an opportunity but keeping an asset (!) for future use.

http://centreforaviation.com/news/synergy-submits-eur15bn-final-bid-for-tap-portugal-15-lower-than-prior-non-binding-proposal-193297

GBM

Today is D day for the sale of TAP. The government is supposed to accept or reject the offer from Synergy.
Publico newspaper did a decent interactive overview here (http://www.publico.pt/multimedia/infografia/tap-22)[PT only]

Let's see if all these TP threads end up in the Avianca forum.
GBM

Bid from synergy was rejected (http://www.bloomberg.com/news/2012-12-20/portugal-shelves-tap-airline-auction-after-rejecting-brazil-bid.html)

So who steps in now?

IAG might take another look, Qatar or Etihad might look to again expand their portfolio, or perhaps Lufthansa is forced to make a move.

The news in the Portuguese press today are the intention of selling TAP before the end of 2014 is still valid.
The official statement is that there seems to have been a lack of bank guarantees from the Synergy group. Although the unofficial version is that the government was unhappy at only getting net 35mio EUR for the transaction and workers as well as opposition parties were hammering on this.
The final offer was in the range of 1.5 bio EUR:
35mio net to the government
316 mio for capital investment (So in effect synergy was keeping the money)
> 1 bio to pay for debts

Links here (http://www.publico.pt/economia/noticia/governo-recua-na-privatizacao-da-tap-1578130) and here (http://www.publico.pt/economia/noticia/efromovich-diz-que-houve-precipitacao-do-governo-1578187) [PT only]

I think it should have been sold.
GBM

I think it should have been sold.
You refer to the proposed purchase conditions and not to the airline being sold without bank guarantees, right?

So who steps in now?

IAG might take another look, Qatar or Etihad might look to again expand their portfolio, or perhaps Lufthansa is forced to make a move.

it seems that Etihad has its pocket full with a series of acquisition, furthermore wouldn't bet their intervention in what is essentially considered AF/KL backyard. Lufthansa bid appears to me too risky, even for the rather lax european antitrust, plus they are going to a period of restructuring in parts of their group. This leaves IAG and QR, perhaps in a joint venture they may be able to snatch TP from either ST or * lock.

You refer to the proposed purchase conditions and not to the airline being sold without bank guarantees, right?

Right. I think Efromovich got overly confident he was going to get it due to the pressure the Portuguese government is under to sell. I think the noise around his political contacts (i.e. The (in)famous Relvas) and the fact he did not present a crispy clean bank guarantee (for 35 mio EUR only) on the date came out to bite him in the end.

GBM

When TAP does go back up for sale, is synergy allowed to bid again? Perhaps they come back with a better deal.

New schedule seems to be a relaunch as of May according to Portuguese newspaper Sol [PT only (http://sol.sapo.pt/inicio/Economia/Interior.aspx?content_id=68491)]

GBM

According to CH-Aviation (http://www.ch-aviation.ch/portal/news/17398-avianca-preparing-second-bid-to-acquire-tap-portugal#disqus_thread)

Avianca Brasil (O6, Rio de Janeiro Santos Dumont (SDU)) is reportedly in the process of preparing a second bid for Portuguese national carrier TAP Portugal (TP, Lisbon Portela de Sacavem (LIS)) after a first bid had failed in December when the Portuguese government decided not to sell TAP to Avianca Brasil parent Synergy Aerospace. Synergy owner Gérman Efromovich has met with the Brazilian government to get support for a proposed second bid, this time by Avianca Brasil, according to aeroTELEGRAPH and Folha de São Paulo. Synergy Aerospace is the majority shareholder in Avianca-TACA and fully owns Avianca Brasil.

According to CH-Aviation (http://www.ch-aviation.ch/portal/news/17398-avianca-preparing-second-bid-to-acquire-tap-portugal#disqus_thread)

Lisbon was a-buzz with this at the weekend. The Chavez funeral, it seems, was the venue for some hard talking and gentle arm twisting.

Indirectly linked to the TP sale, CAPA did the work for the future owner with this benchmark study on productivity (http://centreforaviation.com/analysis/european-airline-labour-productivity-capa-rankings-104204).

The third slide -"European airlines Available Tonne Kilometres (‘000) per employee", seems to paint a picture of too many ground-based employees, similar the to LH comment made (they break it into flying segment and total group)
And the too many employees picture seems to be consistent with the 5th slide - European airlines revenue (EUR) per employee. Worst in class.

GBM

The third slide -"European airlines Available Tonne Kilometres (‘000) per employee", seems to paint a picture of too many ground-based employees, similar the to LH comment made (they break it into flying segment and total group)
And the too many employees picture seems to be consistent with the 5th slide - European airlines revenue (EUR) per employee. Worst in class.

GBM

Such benchmarks are useful first steps in analysing airline productivity, leading to further questions.

Playing field are seldom level and it takes a little more work to account for different approaches to in-house/third-pary operations in areas such as maintenance, and ground handling, among others; and to shape and scale of networks.

I think TAP has yet to outsource fully some employee-rich activities, so any productivity analysis would have more telling impact is it focussed on productivity of key sectors such as cabin crew, pilots, administration.

A further, separate, focus on the productivity of these employee groups on regional and long-haul routes would help remove distortions induced by networks and economies of scale.

I'm not suggesting the results would be at all encouraging for TAP :D, but they would remove some of the anomalies inherent in top level analysis.