TAP operating revenue rose to 977 million euros during the first six months of the year, 20 percent higher than the 814 million registered in 2007. However, despite this remarkable growth, net profit was a negative 136 million euros, the worst in recent years. The result reflects the brutal rise in fuel prices as TAP spent 312 million euros, 133 million more than in the same period, which represents a negative trend of 75%.
A substantial increase in the cost of fuel was already predicted – and budgeted for – but the vertiginous increase that has been verified has exceed all expectations since its price has doubled in just seven months whilst in previous years it took four years for a similar percentage increase to be witnessed.
Reflecting the reality of the industry, the IATA (International Association of Airline Transport Companies) has been successively reducing its forecasts from a profit of 5.6 thousand million in September 2007 to a negative 6.1 million euros more recently.
Company operating profits registered a negative 105 million euros which compares to 6.6 million, also negative in the same period of 2007.
Overall exploitation costs were 32 percent higher than in 2007 and reached 984 million euros.
However, the increase in revenue is confirmation that TAP has continued to grow as has happened throughout recent years, evidence to the fact that only the deviation in fuels has interrupted the consolidation and recovery of the company that achieved its best result ever.
Ticket revenue reached a total of 804 million euros which represents an increase of 21 percent, growth in excess of the 18.2 percent obtained in 2007 compared with 2006.
Activity at the third party customer care Maintenance & Engineering Unit registered around 70 million euros in revenue, evidence of an increase of 29.7 percent in relation to 54 million the previous year.
In Cargo and Mail, TAP revenue rose by 14.7 percent from 47 million in 2007 to 53 million.
Despite revenue from the domestic market having increased by 19.8 percent, increasing its market share from 46 to 52 percent, more than 66 percent of revenue from national air transport was obtained from outside Portugal.
The importance of the company within the context of the Portuguese economy has also been strengthened by the increase in its contribution to national tourism, resulting from substantial increases in air traffic with Portugal as the destination of major issuing markets.
TAP transported a higher number of passengers than ever during the period analyzed, a total of 4,108 million, 22.3 percent more than in 2007. Per network sector, Europe registered 2,426 million passengers (+26.1%), Domestic 769 thousand passengers (12.5%), Brazil 551 thousand passengers (+28.4%), Africa 234 thousand passengers (+19.6%), the USA 84 thousand passengers (+1%) and Venezuela 44 thousand passengers (5.1%).
Company faces the crisis
Maintaining the average prices witnessed in the second quarter, in particular in the month of June, the fuel bill may reach a deficit of 250 million euros by the end of the year.
As soon as the scale of the crisis became clear TAP approved an Emergency Plan with which it intends to resist current difficulties enabling the Company to come out of this stronger when the situation returns to normal again.
Actions are being developed by the company that include interventions both in terms of cost reduction and increased revenue.
