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TAP airline swings to big loss on fuel prices

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Written by editor

LISBON – Portugal’s flagship air carrier, state-run TAP, on Wednesday posted a net loss of 133 million euros ($188 million) for the first eight months of the year, turning around from a profit a year

LISBON – Portugal’s flagship air carrier, state-run TAP, on Wednesday posted a net loss of 133 million euros ($188 million) for the first eight months of the year, turning around from a profit a year earlier on high fuel prices.

Earnings before interest, taxes, depreciation and ammortization in the period slumped 75 percent to 35 million euros, even though operating revenues rose to 1.4 billion euros from around 1.2 billion.

TAP announced eight-month results in order to include the busy summer months. The Socialist government has said it may privatise part of TAP.

“The net result (loss) had an impact of 128 million euros from fuel prices and 10 million euros for our participation in Groundforce, whose results worsened,” said TAP chief financial officer, Michael Conolly.

Groundforce is a service provider for most airlines flying to Portugal. TAP controls the company, which has been plagued by labour disputes and strikes, through its 49.9 percent.

Conolly said it was impossible to make full-year earnings forecasts as everything depended on oil and aviation fuel prices.

TAP’s loss comes after two years of profits in 2006 and 2007, which puts the airline in a different league from troubled national carriers like Italy’s Alitalia SpA.

Alitalia has not had a profit since 1999 and is now being rescued in a painful government-coordinated process after filing for bankrupty protection in late August.

By contrast, last year’s TAP profit was a record 32.8 million euros.