CYCLE OF PROFITS OF TAP HAMPERED BY OPERATIONAL EVENTS AND STRIKES IN THE SECOND HALF OF YEAR

Despite the increase in Traffic and in Load – Factor posted in 2014

After having completed five consecutive years with net profits, TAP posted in 2014 a loss of 46 million EUR, due to several difficulties faced by the company’s operations throughout the year.

As a matter of fact, circumstances such as the delayed delivery and launch into operation of new aircraft and the successive announcements of industrial actions during the second half of the year, along with a number of operational events have to be singled out, for altogether they resulted into a global impact estimated in 108 million EUR.

The particular situation of some key markets also had a negative influence on results, especially Brazil – due to a number of domestic factors in that market as well as to the Football World Cup held in summer – a period during which we have seen some decline in airfares, mainly due to the change in traffic profiles as well as to overcapacity. Likewise, we have seen the growth trend dropping in Africa, on account of circumstances such as the Ebola virus outbreak and some social instability running in a number of countries. Moreover, the negative impact of the exchange rates progression also added to the whole.

But, as most of those factors were indeed context factors, they will not affect the performance of the company neither the results expected for the current year, which seems to be effectively confirmed by the traffic pick up.

In spite of all the difficulties that the company has undergone last year, TAP increased in 6.6 per cent the number of passengers carried in 2014 in its system-wide network, thus reporting the record number of 11.4 million passengers for the first time, that is to say some 711,000 more than in previous year (2013). Amongst all network sectors, Europe had the best performance with an 8 per cent traffic growth, followed by the USA with an increase of 10 per cent.

In 2014, TAP considerably extended the reach of its network, especially with the launch of operations to Colombia and Panama in Latin America, along with the addition of new destinations in Europe and in Brazil. To support such a growth in operations, TAP added six new aircraft to its fleet.

All in all, TAP Passenger Load-factor grew to 80.6 per cent in 2014, some 1.1 percentage points more than in previous year and above the 79.7 per cent load-factor, the number that, according to IATA, was the average one shown by the industry.

Revenue-wise, TAP reached in 2014 a total Revenue of 2,489 million EUR, with an increase of 9 million year on year. In parallel, the company’s operating costs went up to 2,341 million in 2014, increasing 3.4 per cent versus previous year, which mainly resulted from the growth of 5.5 per cent in its operations together with all the costs incurred with the afore mentioned events. In 2014, TAP posted an EBITDAR of 148 million EUR.