Published on : Thursday, December 23, 2021
The European Commission approved that a further, smaller aid measure from Portugal’s government for the country’s ailing flag carrier TAP, having also signed off on a 2.55 billion euro rescue plan for the airline this week.
The European Commission approved 71.4 million euros ($80.9 million) in state aid to compensate TAP for damage suffered in the first half of 2021, as a result of COVID-19 pandemic-related travel restrictions.
Because of these travel restrictions, TAP Air Portugal incurred significant operating losses and experienced a steep decline in traffic and profitability over this period,” the Commission said in a statement.
The aid will comprise a capital injection or a loan. The Commission said the compensation did not exceed what was necessary to address the damage, and the measure did not breach EU antitrust rules.
The smaller chunk of aid comes after Brussels on Tuesday approved an overall rescue plan for the airline, but imposed safeguards to limit distortions to competition.
The 2.55 billion euro restructuring plan for TAP, which is 72.5% controlled by the Portuguese state, involves thousands of job and pay cuts.