The European Commission (EC) has ruled that a €462 million Portuguese support measure in favour of Transportes Aéreos Portugueses (TAP) to be in line with EU State aid rules. The measure aims at compensating the airline for the damage suffered due to the coronavirus outbreak between 19 March and 30 June 2020.
“This measure will enable Portugal to compensate TAP for the damage it suffered as a direct result of the travel restrictions that Portugal and other destination countries had to implement to limit the spread of the coronavirus,” said Executive Vice-President Margrethe Vestager in charge of competition policy at the EC. “Separately, our assessment of the restructuring plan for the company submitted by Portugal is ongoing. We continue being in close and constructive contacts with the Portuguese authorities in this context.”
Portugal notified to the EC an aid measure to compensate TAP for the damage it suffered between 19 March and 30 June 2020 as a direct result of the containment measures and travel restrictions that Portugal and other destination countries had to introduce to limit the spread of the coronavirus. The support will take the form of a €462 million loan that may be converted into capital and disbursed to TAP in one or several instalments.
In order to ensure that there will be no overcompensation, the measure provides that Portugal, by September 2021, Portugal will review and report back to the Commission on the amount of actual damage suffered, following independent verification based on the company's audited accounts. Any public support received by TAP in excess of the actual damage will have to be returned to Portugal.
On 10 June 2020, the EC approved, under EU State aid rules, €1.2 billion Portuguese rescue aid to TAP SGPS – TAP holding company. The rescue aid, which took the form of a loan and loan guarantees and was notified by Portugal and approved by the Commission since it provided the company with the necessary resources to address its immediate liquidity needs. The Portuguese authorities committed that TAP would reimburse the loan or submit a restructuring plan within six months, to ensure future viability of TAP. The EC confirms that it is currently assessing the restructuring plan submitted by Portugal “under a separate procedure”.