European acquisition targets ITA Airways and TAP Air Portugal both flagged improved financial results for 2023, as the Italian carrier reached break-even a year earlier than expected and the Portuguese airline posted record profits.

Italy and Portugal have both begun the process of selling off their respective national carriers. Italy’s finance ministry has agreed a deal to sell a 41% stake in ITA to Lufthansa, while Portugal’s government last year set in motion plans for the reprivatisation of TAP.

TAP A320

Source: Markus Mainka/Shutterstock

TAP Air Portugal carried 15.9 million passengers in 2023

Both processes have hit turbulence, however. European regulators have yet to be convinced that remedies so far proposed by Lufthansa address their competition concerns, while TAP’s privatisation has been delayed by the collapse of Antonio Costa’s government late last year.

ITA Airways, which succeeded Alitalia as Italy’s flag carrier in October 2021, recorded a €70 million ($76 million) EBITDA profit for 2023 and says it reached operating break-even a year earlier than forecast.

While the airline remains loss-making, posting a net loss of €5 million for 2023, ITA says this performance is also ahead of expectations. ITA made a net loss of €486 million in 2022.

The carrier’s improved financial performance was based on a sharp pick-up in its passenger business as strong demand continued post-pandemic. ITA passenger revenues climbed around two-thirds to €2.2 billion as it increased passenger numbers 47% to around 15 million. That drove a 53% rise in total revenues to €2.4 billion.

TAP posted a net profit of €177 million last year – almost trebling the €65 million in made in 2022. That outstripped its previous profit high of 2017 and was achieved despite the airline slipping to a fourth-quarter net loss of €25 million. The airline’s recurring EBIT increased from €268 million to €347 million, marking a profit margin of 9%

Full-year revenue climbed just over a fifth to €4.2 billion in 2023, as passenger levels rose from almost 14 million to just under 16 million. That remains short of the 17.1 million TAP flew in 2019

“2023’s strong results confirm TAP’s recovery path in recent years,” says TAP chief executive Luis Rodrigues. ”Record revenues, surpassing the €4 billion mark, robust and resilient operating margins, and a clear deleveraging trend, confirm the financial strength of the group.

”2024 will be a challenging year that will test the organisational focus, for which we will need the commitment of all our teams to establish TAP as one of the most attractive companies in the sector,” he says.