TAP Air Portugal has disclosed plans to further reduce its fleet after first-quarter net losses almost quadrupled to €395 million ($443 million) amid the Covid-19 pandemic.
The Portuguese carrier says it is analysing capacity and that “a restructuring of the fleet may result”. TAP has already confirmed the exit of three Airbus A319s, one A320, one A321 and a single Embraer 190.
“In addition to these, further aircraft exits are being analysed in order to align with the fleet plan currently under revision,” says the airline. It ended the first quarter with a fleet of 107 aircraft.
TAP’s €395 million first-quarter net loss compares with a €107 million reverse in the same period a year ago. Operating income for the three months ended 31 March 2020 was down 5% at €583 million as costs rose 3.3% to €739 million.
The first two months of 2020 maintained the “positive trend” seen in the second half of 2019, says the Lisbon-based carrier, but these improvements were thrown off course in March when the Covid-19 crisis battered operations.
“The month of March was already significantly impacted by the containment measures adopted by domestic and international authorities that resulted in a significant fall in demand and led TAP to decrease its operating capacity, translating into a progressive deterioration of activity throughout the month,” says TAP.
Passenger numbers more than halved in March compared with the same month in 2019 and capacity was reduced 34%, resulting in a 17.2 percentage-point decrease in load factor, to 62.7%. The airline suspended most of its flights on 1 April and temporarily laid off 90% of its employees.
Despite the impact of the pandemic, TAP says it registered “positive cash flow” from operating activities in the first quarter and ended the period with €280 million in cash and cash equivalents.
The European Commission on 10 June approved a €1.2 billion state rescue loan for TAP. The state aid is subject to approval from the airline’s board.