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News Report: Lufthansa negotiates stake in TAP Air Portugal
Link to article on aerotime.aero
[PT] Link to referenced article on jornaldenegocios.pt
Originally Posted by aerotime.aero
Lufthansa is reportedly engaged in negotiations to acquire a 45% stake in the airline TAP Air Portugal held by David Neeleman, its main private shareholder. To do so, the German carrier is said to have allied with United Airlines.
The local business newspaper Jornal de Negocios reports that David Neeleman is actively trying to sell his half of Atlantic Gateway, a private consortium he formed five years ago with Humberto Pedrosa. Atlantic Gateway holds a 45% stake into TAP Air Portugal, with the rest being owned at 50% by the Portuguese State and at 5% by the employees. It is unclear if Pedrosa is also participating in the divestment negotiations. In November 2019, the same media already claimed that Neeleman was in talks with Lufthansa, United, Air France-KLM, and IAG – information the businessman denied. Neeleman, who was also involved in the now-defunct Aigle Azur, and the Portuguese government have had dissensions in the past regarding the management of TAP Air Portugal. The airline reported a €105.6 million loss in 2019, on top of a €118 million loss in 2018. In addition to the poor economic performance, Neeleman’s project for a stock market launch was dismissed. His decision to award €1.17 million in performance bonuses to the managers last year was received badly and the state warned against doing the same in 2020. |
Yup LH cannot afford another Star member to offer really low J fares. Sad.
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TP, SK and LO consistently offer sub 2000€ TATL business fares yet the LH Group/UA/AC ATI insists to charge 30% more and get away with it. TP is bleeding cash without much external interference.
If a recession hits their leisure market or the super profitable south atlantic business, things will go south very fast. Why the investor is pulling the plug is a mystery. Surely they must have know what they were in for? |
Originally Posted by oliver2002
(Post 32117826)
TP, SK and LO consistently offer sub 2000€ TATL business fares yet the LH Group/UA/AC ATI insists to charge 30% more and get away with it. TP is bleeding cash without much external interference.
If a recession hits their leisure market or the super profitable south atlantic business, things will go south very fast. Why the investor is pulling the plug is a mystery. Surely they must have know what they were in for? https://newsroom.aviator.aero/tap-sg...nnual-results/ |
Originally Posted by TAP-A343
(Post 32118457)
TAP had a net profit of €14.1 million in the second half of 2019. With a bit of luck, they might turn the corner.
https://newsroom.aviator.aero/tap-sg...nnual-results/ They have the new routes ready to ensure a negative by year end. |
Hard to say whether the coronavirus will impact growth this year but Lufthansa taking a stake in TAP won't help. We'll have $500 in YQ alone before you know it in addition to higher business fares
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Originally Posted by GBM.flights
(Post 32119921)
Color me doubtful.
They have the new routes ready to ensure a negative by year end. |
Originally Posted by worldtraveller73
(Post 32121516)
Hard to say whether the coronavirus will impact growth this year but Lufthansa taking a stake in TAP won't help. We'll have $500 in YQ alone before you know it in addition to higher business fares
Given Portugal in recent years has had a stronger economic and fiscal run than much of Europe, the TATL-flying airline industry cartel kingpins wanting to get in on Portugal's growth and developments there isn't all that surprising even if such a consideration to buy an influential stake in TAP weren't about wanting to kill off low-price competition. |
Originally Posted by oliver2002
(Post 32117826)
TP, SK and LO consistently offer sub 2000€ TATL business fares yet the LH Group/UA/AC ATI insists to charge 30% more and get away with it. TP is bleeding cash without much external interference.
If a recession hits their leisure market or the super profitable south atlantic business, things will go south very fast. Why the investor is pulling the plug is a mystery. Surely they must have know what they were in for? |
LH's and UA's motivation in buying is clear, as mentioned above.
Neeleman's motivation in selling seems to be related to governmental interference – the minister wants to prevent TP from paying performance bonuses to employees because a loss has been posted. |
Is it possible LH is interested because TP is stronger in Latin America and might see some benefit to the connectivity? Having TP also gives them more optimal connections that don't require backtracking to a good chunk of Europe as well.
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Originally Posted by PsiFighter37
(Post 32127463)
Is it possible LH is interested because TP is stronger in Latin America and might see some benefit to the connectivity? Having TP also gives them more optimal connections that don't require backtracking to a good chunk of Europe as well.
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It will be interesting to see how the current medical crisis impacts these plans . . . a move upwards in prices wouldn't likely help demand in the short term.
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Originally Posted by PsiFighter37
(Post 32127463)
Is it possible LH is interested because TP is stronger in Latin America and might see some benefit to the connectivity? Having TP also gives them more optimal connections that don't require backtracking to a good chunk of Europe as well.
With Delta taking a stake in LATAM (and moving it from oneworld to SkyTeam) and IAG going through the acquisition of UX (probably to compensate this loss of partnership with LATAM - and despite all the rumors of challenges that deal is facing), LH&UA are seeing in TP an opportunity to compete in the South America region (I believe Portugal and Brazil signed an agreement removing all airspace restrictions between both countries which might be an attractive element as well). The Africa element is probably just a good add-on. |
Ignoring the Covid-related slump in travel, which will either be relatively shortlived or we all have much bigger problems than what happens to a mid-sized airline --- whatever the motivation behind it, LHgroup acquiring TP spells bad news for the travelling public. I wouldn't mind consolidation of smaller EU airlines and have nothing against LH, but a goliath absorbing yet another airline can only lead to less competition.
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