TAP Air Portugal has announced its financial results for the third quarter of 2024, showing a remarkable performance despite difficult global economic conditions. Although the company achieved a net profit of 117,8 million euros, a decrease of 62,8 million euros compared to the same period last year, the airline has significantly improved compared to the pre-crisis level of 2019. Revenue increased by 2024 percent in the third quarter of 2, exceeding 2019 results with an increase in operating income of 23 percent.
TAP Air Portugal, the world's leading airline between Europe and Brazil, has recovered from the pandemic and is pursuing continuous expansion. In the first nine months of 2024, the airline carried a total of 12,3 million passengers, an increase of 1,5 percent compared to the previous year. Capacity increased by 2,3 percent compared to the first nine months of 2023. These advances, especially compared to the years before the pandemic, underline the airline's successful recovery.
Capacity, measured in seat kilometers (ASK), reached 97 percent of 2019 levels in the third quarter, representing a significant step in the airline's recovery as it continues to strive to expand its network of international flights and maximize passenger load factor. The load factor, which measures the percentage of seats occupied, reached 86,2 percent, an improvement of 1,4 percentage points year-on-year and shows that TAP is able to better utilize its capacity.
Increased operating costs and currency problems
However, the airline also faced challenges that weighed on its financial results. Exchange rate losses had a significant impact on net profit. In this regard, TAP stated that the year-on-year decline in net profit was due to the impact of currency devaluation. This highlights the volatile economic conditions facing airlines worldwide and their potential impact on profitability.
Another important factor affecting costs was the increase in personnel costs, which was mainly due to new collective agreements and the increase in salaries under these agreements. These collective agreements, which came into force in the fourth quarter of 2023, had a significant impact on operating costs in the third quarter of 2024, as the salary adjustments had not yet been fully reflected in previous years. Personnel costs increased by 26,3 percent, amounting to around EUR 44,9 million.
Strengthening market position and innovative strategies
Despite these challenges, TAP is showing positive development in other areas. Particularly noteworthy is the area of maintenance services, where the airline has recorded a significant increase in revenues of 48 percent. This is mainly due to the increasing demand for engine maintenance, indicating that TAP has successfully expanded and optimized its infrastructure services.
The company is also benefiting from a stable cargo business. Revenue from cargo and mail increased by 8,6 percent, reflecting a positive development in a sector that has been affected by fluctuating demand for many airlines. However, TAP has been able to offset this decline with higher load factors, demonstrating the airline's flexibility and adaptability.
balance sheet and financial structure
As of September 30, 2024, the airline had a strong liquidity position, with cash and cash equivalents of €943,1 million, an increase of €153,7 million compared to the beginning of the year. This solid liquidity reserve gives TAP the flexibility it needs to invest in the modernization of its fleet and the expansion of its routes. TAP continues to pursue a sustainable fleet strategy and recently put new A320 NEO aircraft into service, which meet the market's environmentally friendly requirements.
TAP has also completed a successful bond issue of 400 million euros, which further strengthens its financial stability. This action will allow the company to optimize its financial structure and meet the commitments of the restructuring plan. According to CEO Luís Rodrigues, the positive reaction of investors to this issue is a clear sign of the trust that TAP enjoys in the financial world.
Outlook
TAP Air Portugal made significant progress in the third quarter of 2024 despite global economic uncertainties and air traffic management challenges. The company continued to expand its capacity and passenger volumes while improving operational efficiency. The airline remains optimistic about its future development and continues to focus on a sustainable and profitable direction. Investments in fleet modernization and expansion into strategic markets such as Brazil and the Brazilian market underline the airline's long-term growth potential.
TAP's financial position remains stable and, with a solid liquidity base and an improved debt structure, the company is well equipped to respond to the challenges ahead and continue to operate as one of the leading airlines in Europe and worldwide.
and 