TAP Air Portugal (TP, Lisbon) and the Portuguese government have concluded a final deal to save the ailing flag carrier, with the state set to buy a 22.5% stake from minority shareholder David Neeleman and thus take majority ownership of the airline, ministers confirmed at a news conference late on July 2.

Following prolonged talks with the airline’s minority shareholders, including Neeleman’s and Humberto Pedrosa’s consortium Atlantic Gateway, the government will raise its stake in TAP from 50% to 72.5% for EUR55 million euros (USD62 million), the Jornal de Negócios business newspaper reported.

Pedrosa will retain his 22.5% stake in TAP, as will the employees, who currently collectively own a 5% share.

Finance Minister João Leão said that “the state will now play a key role in TAP”. At the same time, Infrastructure Minister Pedro Nuno Santos added that “fortunately, we avoided the nationalisation of TAP,” according to the Associated Press news agency.

On June 10, as previously reported, the European Commission gave the Portuguese government permission to inject EUR1.2 billion (USD1.35 billion) into TAP, as long as the company’s operations and costs were scaled back. In return for the cash, the government insisted on gaining more control over the carrier’s finances, but the private investors had resisted altering TAP’s ownership structure, Santos said.

The government will not manage TAP, he clarified, and will instead appoint a private company to search the international markets for a qualified team to administer the airline.

Earlier this week, Santos told Portugal’s parliament that the flag carrier “is too important for our country to let it fail,” in large part because it brings around half of the tourists who arrive by air. “It would be a disaster if we lost TAP,” he said.

Atlantic Gateway took a 61% stake in the Portuguese carrier in a 2015 privatisation, but later that year a new centre-left government sought to scale back the process. In February 2016, Lisbon agreed with the consortium for the state to have 50%, Atlantic Gateway 45%, and employees the remaining 5%.

Neeleman also has stakes in Azul Linhas Aéreas Brasileiras (AD, Sao Paulo Viracopos), JetBlue Airways (B6, New York JFK), and start-up Breeze Airways (MXY, Salt Lake City), while Humberto Pedrosa owns Portuguese transport conglomerate Barraqueiro Group.

TAP, which has a workforce of around 10,000, posted losses for the last two years and a EUR395 million (USD444 million) loss in the first quarter of 2020.

It recently resumed some of its international operations in Europe, including to London Heathrow, Madrid Barajas, Milan Malpensa, Paris CDG, and Rome Fiumicino. Before the COVID-19 pandemic hit, it operated about 2,500 flights a week. Local media reports in May suggested that it may cut jobs by 10% and its fleet by 25%, including eight long-haul and 23 medium-haul aircraft.

According to the ch-aviation fleets advanced module, TAP operates seventeen A319-100, nineteen A320-200, seven A320-200neo, four A321-200, thirteen A321-200neo, seven A330-300, and nineteen A330-900 aircraft. Its Portugália Airlines (NI, Lisbon) subsidiary operates nine E190s and four E195s.