A decision has been made amidst ongoing litigation with the Brazilian airline Azul, as TAP’s management was instructed by the Government to negotiate a resolution with the South American carrier.
The Minister of Infrastructure refrains from providing further details on the matter, noting that TAP is in discussions with Azul and that the dispute “will be decided in court.” He assures that this will not impact TAP’s reprivatization, which took its first step today with the approval of the decree-law by the Council of Ministers, as future stakeholders will be informed of the situation.
The insolvency filing of the former TAP SGPS was anticipated, considering that SIAVILO virtually lacks assets and has a negative net position exceeding one billion euros, with its board members resigning over the past months. As a creditor of the holding company, TAP has initiated the insolvency proceedings.
SIAVILO has defaulted on a bond loan subscribed by Azul in 2016. At that time, the Brazilian company subscribed to 90 million euros of a bond loan to TAP, aimed at aiding the liquidity of the Portuguese company, with accumulated interest expected to raise the value to around 180 million euros next year, according to estimates shared recently with Lusa by Azul’s Vice President of Institutional and Corporate Affairs, Fábio Campos.
Despite TAP SGPS no longer holding any stake in TAP SA (the operational company owning the airline), it is the assets of the latter that secure the loan contracted with Azul. This situation has exacerbated the disagreement between the two companies.
The conflict between the two firms has been ongoing since the summer of 2024, with extrajudicial resolution attempts falling through. In November, TAP filed a lawsuit in Portugal.
Azul, meanwhile, entered a Chapter 11 bankruptcy filing in the U.S. on May 28, aiming for a financial restructuring that includes $1.6 billion in financing and the elimination of over $2 billion in debt.
Azul, founded by David Neeleman, a former shareholder of TAP, argues that the debt should be considered in the Portuguese airline’s reprivatization process. “We believe this debt must be addressed before any privatization advances,” stated Fábio Campos in the same interview with Lusa.
Azul’s restructuring plan, supported by strategic partners such as United Airlines, American Airlines, and the lessor AerCap, is expected to be completed by early 2026.
Today, the government took the first step to initiate the sale of TAP, which is set to have private shareholders again after the government moved forward with nationalization in 2020 due to the pandemic’s impact on air transport.
The decree-law approved by the Council of Ministers provides for the sale of up to 49.9% of the airline’s capital through a direct sale model, with up to 5% reserved for employees, as stipulated by the privatization law.
