Portugal’s TAP airline announces record-breaking profits for first nine months of 2023

THE Portuguese airline TAP recorded record profits of in the first nine months of 2023.

According to information released by the company this Tuesday, October 24, a profit of €203.5 million was made, with €180.5 million in the third quarter alone.

In a statement, TAP stated that its quarterly net profit was the highest since quarterly records began. Compared to the corresponding third quarter of 2022, they saw a rise of €69.2 million, and €179.4 million compared to the same period of 2019, the final quarter before the pandemic.

Operating revenues in the first nine months of the year reached €3.2 billion, which TAP described as a ‘robust increase’ of €725 million compared to the same period in 2022. That is equivalent to an increase of 29.7 per cent, according to cmjornal.pt.

How did capacity compare to the first nine months of 2022?

Capacity also surpassed pre-crisis levels, reaching 101 per cent, representing an increase of 16.5 per cent compared to the first nine months of 2022.

From January to September this year, TAP recorded a Recurrent EBITDA of €752.4 million, with a margin of 24 per cent, as well as a Recurrent EBIT of €400.7 million, with a margin of 13 per cent.

The statement highlighted that even with this reduction, there was ‘a significant improvement’ in the Net Financial Debt / EBITDA ratio on September 30, 2023. This relates to earnings, before interest, taxes, amortisation and depreciation. It reached a level of 2. 4x, marking ‘notable progress’ compared to the 3.5x ratio recorded at the end of 2022, TAP said.

Luis Rodrigues, TAP’s executive president, was quoted in the statement as saying: ‘The 3rd quarter results are encouraging and validate the organisation’s focus on executing a good summer for our passengers’.

‘We are taking solid steps to improve the robustness of our operations and the quality of the service we provide to our passengers, accelerating the recovery from the last two difficult years’, he highlighted.

How much did it cost TAP to operate in the third quarter?

In the third quarter, the number of passengers transported increased by 5.2 per cent compared to the same period in 2022, with 5.7 per cent more flights than in the same period last year.

Revenues from the passenger segment increased by €179.4 million, an increase of 17.9 per cent compared to the third quarter of last year, reaching a total of €1,181.3 million.

Recurring operating costs reached €982.2 million, an increase of 1.7 per cent compared to the third quarter of 2022, equal to a €16 million rise.

‘This variation mainly results from the increase in traffic operating costs (an increase of €45.8 million or 20.8 per cent), reflecting higher levels of activity, and the increase in personnel costs (of €64.5 million or 60.5 per cent) due to the continued replacement of the majority of cuts on salaries, mainly offset by the reduction in fuel costs (€86.4 million less), said TAP.

When compared to the same period in 2019, TAP’s recurring operating costs increased by 7.8 per cent, mainly ‘due to the increase in fuel costs and traffic operating costs’, they explained.