The government of Portugal has sacked the chief executive of state-owned carrier TAP Air Portugal (TP, Lisbon) following the delivery of a final report from the Inspectorate General of Finance (Inspeção-Geral de Finanças - IGF) probing an irregular severance payment of EUR500,000 euros (USD534,000) handed last year to a former executive board member.

Christine Ourmières-Widener and the airline’s chairman, Manuel Beja, were dismissed “with just cause” - without the right to receive compensation - after the IGF concluded that the severance deal signed between TAP and the former board member, Alexandra Reis, was illegal. This “makes the return of the unduly paid sums required,” Finance Minister Fernando Medina said during a press conference at the Ministry of Finance on March 6, as quoted by the newspaper Público.

Of the total she received, Reis will have to return EUR450,110 (USD480,468), because that is the part that the report considered to have been allocated illegally, he elaborated.

“It is essential to turn the page, while recognising the merits of the current management” in the implementation of the company’s restructuring plan, which has included job cuts and will culminate in its upcoming partial privatisation. Stressing that the scandal had had a negative impact on TAP’s reputation, Medina said it was necessary “to recover the bond of trust between the country and the company.” However, he assured in response to one question that “the entire executive committee will not fall.”

He added: “The path of stabilisation and privatisation is not in question” and “the government expects to open the privatisation process soon.”

Medina has himself been the target of criticism over the payment made by TAP, which received a taxpayer-funded bailout, insisting he was unaware of the compensation package given to Reis, who afterwards became treasury secretary of state but resigned from that position in late December as the scandal gathered steam. Infrastructure Minister Pedro Nuno Santos was dismissed at around the same time.

Luis Rodrigues, the current president of SATA Air Acores (SP, Ponta Delgada) and chief executive of its subsidiary Azores Airlines, which is itself seeking privatisation in 2023, will take over as both chairman and CEO of TAP. Medina thanked the president of the regional government of the Azores, José Manuel Bolieiro, for understanding, the newspaper Correio dos Açores reported. Only last week, SATA COO and CCO Mário Chaves left the Azorean carrier to become the new director general of TAP regional carrier Portugália Airlines (NI, Lisbon).

Christine Ourmieres-Widener, who is French and previously worked at Air France, CityJet, and flybe. (2002), had already clarified on Friday, March 3, that TAP would comply with the conclusions of the IGF’s final report on the compensation paid to Reis, a decision that local media speculated could lead to her being ousted.

Once she was, she accused the inspectorate on March 6 of “discriminatory behaviour” and hinted at, “in due time, legal consequences” in retaliation, the business daily Jornal de Negócios reported. This was especially the case given her “perplexity at finding that, regrettably, she was the only person directly involved” in the process “who was not heard personally before the IGF.”