The European Commission has approved, under EU State aid rules, Portugal's plans to grant a €1.2 billion rescue loan in favour of Transportes Aéreos Portugueses (TAP), according to a statement earlier today on the EC’s website.
Ryanair has been a vocal critic of state aid to European airlines arguing it amounts to unfair competition, but the EC’s statement said that the measure will provide TAP with the necessary resources to address its immediate liquidity needs, without unduly distorting competition in the single market.
Executive vice president MargretheVestager, in charge of competition policy for the EC said, "This €1.2 billion Portuguese rescue aid will help TAP Air Portugal face its liquidity needs and pave the way for its restructuring to ensure its long-term viability.
In a sector that has been hit particularly hard by the coronavirus outbreak, the measure will help avoiding disruptions for passengers. With the progressive lifting of travel restrictions and the upcoming touristic season, it also indirectly benefits the Portuguese tourism sector and economy as a whole. We continue working closely with Member States to find solutions to support companies in these difficult times in line with EU rules.”
TAP Air Portugal has a fleet of 105 planes, TAP Air Portugal served 95 destinations in 38 countries in 2019, carrying over 17 million passengers from its main hub, Lisbon, and other Portuguese airports to various international destinations.
On June 9 2020, Portugal notified the Commission of its intention to grant a €1.2 billion rescue loan to TAP. The measure aims at providing TAP with sufficient resources to address its immediate liquidity needs, with a view of preparing a plan for the long-term viability of the company.
The EC said that the Portuguese authorities have committed that TAP will reimburse the loan or submit a restructuring plan within six months, to ensure its future viability.