TAP cuts first quarter loss but warns about ‘significantly higher’ fuel prices

Portuguese carrier TAP reported a reduced first quarter loss while indicating “resilient” booking trends.

The flag carrier, which is being partially privatised, saw the net loss narrowed by 63% year on year to €39.9 million as operating revenues rose by 11% to €914.4 million.

Passenger numbers rose 6.4% to 3.7 million and load factor improved 4.8 percentage points to 83.5%, driven ​by South ​and North ⁠American markets.

Chief executive Luis Rodrigues said: “In a context of significantly higher fuel prices, the impact on the first quarter was limited, reflecting the usual pricing lag.

“We expect the effects of higher fuel prices to weigh on the coming quarters, and we remain focused on mitigating this through disciplined capacity allocation, rigorous cost management and active revenue management.

“Looking ahead, we will continue to execute our strategy with discipline, maintaining a strong focus on revenue quality, operational resilience and sustainable growth, as we navigate an increasingly challenging and uncertain environment.”      

The first quarter performance reflected a “clear focus” on delivering the airline’s strategy, with the South and North American markets continuing to play a key role in driving the increase in operations and revenues, “translating into a meaningful improvement in operating results, despite a highly challenging external environment, marked by persistent supply chain constraints and operational challenges related to the implementation of the Entry/Exit system at European airports,” Rodrigues noted.

Looking forward, the carrier described a “resilient booking momentum”, supporting improved load factors and higher unit revenues.

“The impact of fuel prices is expected to be partially mitigated through a combination of revenue and cost measures, including market‑aligned pricing and disciplined cost execution,” the financial statement said.

“TAP will maintain its focus on core markets and revenue quality, leveraging its network strengths and geographical advantage.

“Ongoing fleet modernisation will continue as planned, supporting efficiency gains.

“Given the ongoing disruption in the Middle East, TAP remains resilient, supported by active mitigation measures, and will maintain the flexibility to adapt its operations as conditions evolve.”