TAP sales jump 18% in the first half of 2018

The first-half financial profits show that TAP is still growing and has increased its overall sales by 18%. The most important markets were Portugal, Brazil and North America, which jointly expanded by around 15% and accounted for 56% of all TAP sales. Other markets also performed positively compared with the same period in 2017, including Austria (+44%), Germany (+42%), the UK (+28%) and Spain (+19%).

The restructuring of TAP M&E Brasil took a significant step forward with a total reduction of about 1,000 employees from its payroll, practically half of the workforce of the subsidiary at the start of this process. Adjusting capacity to demand has ensured a high level of usage which, along with a new sales policy and various cost-cutting initiatives, has meant the subsidiary has managed to make an operating profit, excluding restructuring costs, of around €1 million.

In the first half of the year, TAP sealed wage agreements with most professional classes in the company, which also implied some important salary increases to ensure corporate peace within the company for the next five years.
In the first six months of the year, TAP also made many investments to improve its punctuality, particularly by hiring more crew members and providing backup aircraft, it ordered a capacity improvement study for Lisbon airport and it developed new internal processes.

The company was challenged in those six months by a significant increase in fuel prices (+36%), by the volatility of the currencies in the main markets where TAP operates and by operating irregularities. Non-recurring costs totalled €40 million and that negative impact contributed towards an operating loss of €47 million (compared to an operating loss of €43 million in the same period the year before) and a net loss of €90 million in the half-year (compared to a net loss of €54 million in the first half of 2017). Excluding the effects of the non-recurring items, the operating loss would have been €7 million (compared to a recurrent operating loss of €59 million in the first half of last year) and the net loss would have been €58 million (compared to the net loss of €67 million in the same period in 2017). 

The second half will make a fundamental contribution to the TAP annual profit, as usual. As well as being traditionally stronger, this half-year will also benefit from the company's plans to reduce irregularities, namely by hiring and training more pilots and cabin crews, as well as changes to the shift planning structure and measures to increase punctuality. Furthermore, the second half of the year is also going to be a period of expansion as the company is going to receive new aircraft, particularly the new A330neo that TAP is going to be the first in the world to operate and which will enable the company to launch new routes soon.