Lisbon--A 10-day strike by pilots at TAP Portugal, a plunge into losses and sky-high debt have steered the airline, and the government's plans to sell it to private investors, into turbulence.
With investors required to submit offers by Friday, even Prime Minister Pedro Passos Coelho has recognised that the strike -- the longest at the airline in four decades -- threatens to derail his government's second attempt in three years to privatise the airline.
"If the privatisation doesn't take place, the alternative is a restructuring that will certainly include job cuts and a reduction in routes served," he said this past week, in a thinly-veiled warning to the striking pilots.
This is not where Coelho hoped TAP would be when the sale of a 66 percent stake in the airline was launched in November last year.
Coelho's centre-right government had hoped the privatisation of TAP in June would provide a small boost to government coffers, which have been under stress as the country pursued austerity policies under an international bailout programme, and so help its chances of reelection this year.
Four groups of investors were circling TAP, which boasts the most connections with Brazil of any European airline and had been flying high after a 42-percent jump in net profit in 2013 to 34 million euros ($38 million).
But the airline then posted a net loss of 46 million euros for last year due to delays of new planes and repeated strikes. TAP is also short of cash and is weighed down by a debt of over a billion euros.
AFP
