Lisbon has sacked Manuel Beja and Christine Ourmières-Widener, the chairman of the board and chief executive respectively ,of state-run flag carrier TAP.
The ousted pair are to be both replaced by Luís Rodrigues, chief executive of Azores-based airline SATA.
The sackings relate to a disputed severance package, said to be worth around half a million euros, made to former TAP director Alexandra Reis, who has since been named secretary of state for the treasury.
The announcement was made by Portuguese finance minister Fernando Medina, during a press conference with his infrastructure counterpart João Galamba.