TAP's 2024 Profit Decline Due to Court-Ordered Back Pay
By Sergio Goncalves
LISBON (Reuters) - Portugal's flag carrier TAP on Wednesday posted a near 70% drop in 2024 profit as its fourth-quarter loss more than doubled chiefly due to one-off labour cost provisions after court-ordered retroactive payments to thousands of cabin crew.
CEO Luis Rodrigues said last year was marked "by intensified competition in our key markets, strong currency devaluations and operational challenges", and while he expected 2025 to also be a challenging year, the management "will remain focused on transforming TAP into a sustainably profitable airline".
TAP has long been earmarked for privatisation, but the process stalled again as the centre-right minority government collapsed two weeks ago and is now in a caretaker role.
While TAP's profit fell to 54 million euros ($58.21 million) last year, its recurring earnings before interest, taxes, depreciation and amortisation edged 0.4% higher to 875 million euros. Recurring EBITDA rose 9.5% in the last quarter of 2024, it said.
In the fourth quarter alone, it booked a loss of 64.5 million euros, "mainly impacted by non-recurring labour provisions" after the Supreme Court ruled that thousands of cabin crew members on short-term contracts who were laid off and later reinstated as staff should get retroactive pay.
The airline did not disclose the amount of provisions it set aside. Unions have estimated the ruling could affect a total of 2,000 employees, potentially costing TAP up to 300 million euros.
Full-year operating income rose 0.7% to 4.24 billion euros, despite a 0.8% decrease in passenger revenues, it said. Passenger numbers rose 1.6% to more than 16 million.
Operating costs increased 1.5% to 3.9 billion euros due mainly to a 13% rise in personnel costs, while fuel costs declined 6.2%.
($1 = 0.9270 euros)
($1 = 0.9276 euros)
(Reporting by Sergio Goncalves; Editing by Sharon Singleton)
