Portuguese flag carrier TAP Air Portugal has recorded a net profit of €117.8 million ($124.2 million) for the third quarter of the year, down by €62.8 million ($66.2 million) when compared to the same period of 2023, with the airline citing the impact of foreign exchange losses for the reduction in profits.
For the period, operating revenues saw an increase of 2% in comparison to the same period of the previous year, rising to €1.28 billion ($1.35 billion), this figure also represents 123% of operating revenue from the third quarter of 2019. The carrier saw ticket revenues increase during the quarter by 0.5% to €1.18 billion ($1.24 billion).
Recurring operating costs totalled €1.04 billion ($1.09 billion) for the quarter, an increase of 6.4% when looking at the comparable period of the year prior, with this being put down to an increase in personal costs due to new labour agreements.
Recurring EBITDA accumulated to €372 million ($392 million) during the quarter, representing a margin of 29%. Considering non-recurring items, EBIT amounted to Considering non-recurring items, EBIT amounted to €227.2 million ($239.5 million).
Aside from finances, looking at capacity over the three-month period, TAP saw an increase in passenger numbers of 1.3% in comparison to the third quarter of 2023, while the number of flights operated decreased by 1.9%.
Capacity measured in available seat kilometres (ASKs) increased by 1.2% compared to the third quarter of 2023, representing 97% of pre-covid levels in the third quarter of 2019. Load factor saw an increase of 1.4 percentage points to 86.2% when compared to the previous year.
From an operational standpoint, a new route connecting Lisbon to Florianopolis has been launched. As of September 30, 2024, the carrier’s operational fleet comprised of 99 aircraft, reflecting the addition of one A320neo and the retirement of one A319 during the quarter. Notably, 69% of the medium- and long-haul fleet now consists of neo family aircraft, up from 68% in September 2023 and 33% in September 2019.
Luís Rodrigues, TAP's chief executive officer, commented on the quarter noting that he is pleased with the airline’s performance despite challenges during the three-month period: “We are pleased with our performance in the third quarter of 2024, despite the two major challenges faced: the difficult situation of air traffic management in Europe, and the significant currency devaluations. The improvement in punctuality and NPS (Customer Satisfaction Index) and the stabilisation of regularity confirm a more robust operation with a better service for our customers, resulting in increased revenues and consolidation of operating results.”
Rodrigues continued: "The success of the senior notes offering, with a clear creation of value for TAP, given the significant reduction of the implicit spread, resulted from a positive response by investors to the Company's financial performance. Despite the current challenging context of the sector, we remain focused on transforming TAP, with the support of our people and stakeholders, into a sustainably profitable airline and one of the most attractive companies in the industry.”
Away from the third quarter, and for the first nine months of the year TAP recorded an accumulated net income of €118.2 million ($124.6 million), decreasing by €85.3 million ($89.9 million) when compared to the same period of the previous year.
Operating revenues totalled €3.25 billion ($3.42 billion) which represents an increase of 2.8% compared to the first nine months of 2023 and an increase of 30.6% compared to figures recorded in 2019. Additionally, recurring EBITDA reached €744.8 million ($785 million) in the period between January and September, with a margin of 22.9%, decreasing by €7.6 million ($8.01 million) or 1% compared to the same period of the year prior.
TAP carried a total of 12.3 million passengers during the period, which represents an increase of 1.5% compared to the previous year, reaching 95% of the values achieved in 2019. The carrier's total number of flights operated decreased by 1.1% compared to the same period nine-month period of last year. Load Factor increased by 1 percentage point in comparison to 2023, reaching 82.9%.
Looking ahead to the fourth quarter of the year, reserves are slightly above the previous year and are expected to offset some pressure on yields. In November, the issuance of senior notes in the amount of €400 million with a coupon of 5.125% was successfully concluded, which allows TAP to optimise its financial structure and meet the commitments of its restructuring plan. In the final quarter of the year, investment in the Brazilian market continues, with the opening of the new route to Manaus, as well as investment in fleet modernisation, with the delivery of two new A320neo aircraft, replacing two aircraft from the A320ceo family.