Friday, August 30, 2024 In the first half of 2024 (1H24), TAP Air Portugal achieved operating revenues of EUR 1,969 million, marking a 3.3% increase compared to the same period in 2023. This growth was fueled by a 2.
9% rise in passenger capacity and a 0.8 percentage point improvement in load factor, along with a substantial 36.7% boost in Maintenance and Engineering revenues.
TAP also saw a notable improvement in its recurring operating results for the first half of 2024. The airline’s recurring EBITDA climbed to EUR 372.7 million, an increase of EUR 11.
0 million, reflecting a 19% margin. Additionally, the recurring EBIT reached EUR 139.2 million, up by EUR 14.
7 million, representing a 7% margin. The airline posted a modest net profit of EUR 0.4 million for 1H24, driven by a strong second quarter performance with a net profit of EUR 72.
2 million, which offset the losses from the first quarter of the year. As of June 30, 2024, TAP Air Portugal maintained a robust liquidity position, with cash reserves totaling EUR 1,175.7 million, a significant increase of EUR 386.
3 million from the end of 2023. The airline also improved its Financial Debt to EBITDA ratio, reducing it to 2.1x compared to 2.
6x at the close of 2023, demonstrating a commitment to disciplined and prudent financial management aimed at bolstering investor confidence. Looking ahead to the second half of 2024, TAP anticipates stable booking levels similar to the previous year, albeit with some pressure on yields. The airline is set to expand its focus on the Brazilian market by launching a new route to Florianopolis and reopening the Manaus route, increasing its offering to 13 destinations across 15 routes.
Luís Rodrigues, CEO of TAP, believes that “in the second quarter of 2024, we continued the necessary path of structural transformation of TAP. The investment in people and operations continues to confirm the focus and show results: a significant reduction in disruptions, the continuous increase in punctuality and regularity, and the increase in NPS (the customer satisfaction index), with consequent growth in revenues. Special mention goes to the Maintenance and Engineering area, which is beginning to realize its potential.
” “The strong performance in the second quarter,” Luís Rodrigues continued , “allows for a positive net result in the semester, which, despite being reduced, is achieved for the second consecutive time, but now without salary cuts.” “We continue on the path we set out to follow, with the commitment of our people and the support of our stakeholders: to establish TAP as a sustainably profitable company and one of the most attractive in the industry,” concluded TAP’s CEO. Second Quarter 2024 Analysis In the second quarter of 2024 (2Q24), TAP Air Portugal experienced growth in both passenger numbers and flights operated compared to the same period in 2023 (2Q23).
The number of passengers transported increased by 2.4%, while flights operated saw a modest rise of 0.7%.
When compared to pre-crisis levels in 2019 (2Q19), passenger numbers reached 92%, and flights operated reached 87%. Capacity, measured in Available Seat Kilometers (ASK), grew by 2.1% compared to 2Q23, surpassing pre-crisis levels and achieving 102% of 2Q19 capacity.
The load factor improved by 1.4 percentage points year-over-year, reaching 82.7%, though it remained slightly below the pre-crisis level by 0.
8 percentage points. TAP’s operating revenues totaled EUR 1,106.7 million in 2Q24, marking a 3.
4% increase from 2Q23 and representing 133% of the revenue levels seen in 2Q19. Ticket revenues rose by EUR 8.3 million, reaching EUR 986.
4 million, though the Passenger Revenue per Available Seat Kilometer (PRASK) slightly decreased by 1.2% compared to 2Q23. However, compared to 2Q19, PRASK showed a significant increase of 30.
2%. Maintenance revenues experienced a robust growth of 71.4%, reaching EUR 71.
8 million, driven largely by increased activity in the engine shop. In contrast, Cargo and Mail revenues declined by 9.9%, amounting to EUR 39.
3 million, reflecting a continued normalization of cargo yields in the market. Recurring operating costs were reduced by 1.2% compared to 2Q23, totaling EUR 924.
1 million. This decrease was mainly attributed to a reduction in traffic operating costs, particularly due to lower ACMI hiring and reduced irregularity costs. Additionally, impairment costs decreased significantly, including the reversal of impairment related to Groundforce following the approval of its restructuring plan.
These reductions were partly offset by an 18.1% increase in personnel costs, driven by new company agreements implemented in the second half of 2023. The Total Cost per Available Seat Kilometer (CASK) for recurring operating costs decreased by 3.
2%, reaching EUR 6.93 cents, with a 3.4% reduction in CASK excluding fuel costs, down to EUR 4.
95 cents. TAP’s recurring EBITDA rose to EUR 289.0 million, an increase of 19.
6% compared to 2Q23. Recurring EBIT also saw a significant rise, up 35.5% to EUR 182.
5 million, with a margin of 16.5%. When considering non-recurring items, EBIT totaled EUR 168.
0 million. Compared to 2Q19, both recurring EBIT and total EBIT saw substantial increases. Net income for 2Q24 was EUR 72.
2 million, reflecting an EUR 8.1 million decrease from 2Q23, largely due to foreign exchange losses resulting from the depreciation of the Brazilian Real, which offset operating gains. Nevertheless, this represents a significant improvement of EUR 77.
6 million compared to 2Q19. As of June 30, 2024, TAP’s balance sheet showed a strong cash and cash equivalents position of EUR 1,175.7 million, an increase of EUR 386.
3 million from December 31, 2023. The airline’s net financial debt/EBITDA ratio improved markedly to 2.1x, down from 2.
6x at year-end 2023. Operationally, TAP reopened five summer season destinations from Lisbon: Ibiza, Alicante, Palma de Mallorca, Menorca, and Agadir. Additionally, a new route from Lisbon to Caracas, with a return via Funchal, was launched for the summer season.
As of June 30, 2024, TAP’s operational fleet consisted of 99 aircraft, with 68% of the medium and long-haul fleet comprising NEO Family aircraft, compared to 67% a year earlier and 27% in 2019..
