# Portuguese airline TAP swings to profit earlier than expected
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-21
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: TAP Portuguese Airline Turns Profit in 2022, Ahead of Plan | Reuters
Meta Description: TAP turned a profit in 2022, beating expectations with strong revenue growth and cost reductions amidst soaring fuel prices. Exciting news for the airline
URL: https://financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expectedhtml

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LISBON (Reuters) – Portuguese airline TAP swung to a profit in 2022, earlier than expected in its restructuring plan, as rising revenue and lower staff costs offset soaring fuel prices, the state-owned company said on Tuesday.

TAP said it made a net profit of 65.6 million euros ($70.4 million) in 2022 compared with a net loss of 1.6 billion euros a year earlier, when it was feeling the effects of the pandemic.

In 2022, TAP flew 13.8 million passengers, up from 5.8 million a year earlier and about 81% of pre-pandemic levels.

The airline is currently restructuring under a Brussels-approved 3.2-billion euro rescue plan which includes downsizing its fleet, cutting [thousands of jobs](https://www.financedigest.com/meta-plans-to-cut-thousands-of-jobs-as-soon-as-this-week-bloomberg-news.html "Meta plans to cut thousands of jobs as soon as this week – Bloomberg News") and reducing the wages of most workers. Under the plan, TAP aimed to achieve positive operating results in 2023 and a net [annual profit](https://www.financedigest.com/coca-cola-hbcs-annual-profit-beats-warns-of-price-increases.html "Coca-Cola HBC’s annual profit beats, warns of price increases") in 2025.

TAP’s operating [revenue jumped](https://www.financedigest.com/orpea-shares-jump-on-q4-revenue-and-cash-boost.html "Orpea shares jump on Q4 revenue and cash boost") to 3.5 billion euros in 2022 from 1.39 billion euros a year earlier. Recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) of 777.7 million [euros](https://www.financedigest.com/germanys-merck-to-invest-300-million-euros-in-us-gas-plant.html "Germany’s Merck to invest 300 million euros in US gas plant") compared with a negative 999 million euros in 2021.

During the first full [year of the restructuring plan](https://www.financedigest.com/3-factors-to-plan-for-in-2017-a-year-like-none-other.html "3 Factors to Plan for in 2017, A Year Like None Other"), TAP generated an operating profit that is an all-time record for the company,” outgoing Chief Executive Officer Christine Ourmieres-Widener said in a statement.

The company managed to be profitable even though fuel [costs more than tripled in 2022 from the previous year](https://www.financedigest.com/commonenergy-mistakes-costing-homeowners-hundreds-of-pounds-each-year.html "Commonenergy mistakes costing homeowners hundreds of pounds each year") to 1 billion euros.

The government has said it was considering an outright or partial sale of the airline, with Lufthansa, Air France-KLM and [British Airways owner IAG seen as potential buyers](https://www.financedigest.com/what-brexit-mean-for-british-buyers-in-spain.html "WHAT BREXIT MEAN FOR BRITISH BUYERS IN SPAIN").

In early February, Portugal’s [finance minister](https://www.financedigest.com/scottish-finance-minister-kate-forbes-to-run-for-countrys-leadership.html "Scottish finance minister Kate Forbes to run for country’s leadership") Fernando Medina said the government was doing the required preliminary work to start the privatisation process.

($1 = 0.9324 euros)

(Reporting by Patricia Vicente Rua; Editing by Inti Landauro and Mark Potter)


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