A consortium led by American-Brazilian investor David Neeleman will take control of indebted Portuguese state airline TAP. David Pollard asks who will get the most out of a deal that potentially ends a drawn-out sales process that's faced strong opposition from unions.
It's been a long wait. But Portugal's privatisation of its debt-laden airline is moving. David Neeleman will head a group of investors to rescue TAP. And comes with airline pedigree - the Brazilian-American investor is the founder of JetBlue in the US and CEO of Azul Brazilian airlines. In a sector notorious for bankruptcies and pressured margins, Portuguese leaders are hailing the deal as the only option. Anything else would have meant liquidation, they say. Portuguese transport minister, Sergio Monteiro. (SOUNDBITE) (Portuguese) SECRETARY OF STATE OF INFRASTRUCTURES, TRANSPORT AND COMMUNICATIONS, SERGIO MONTEIRO, SAYING: "For comparison with the values that have just been transmitted to you, this privatization is, from all points of view, in financial terms a success." The government is to retain a 34 percent stake. 61% goes to Neeleman's Gateway consortium, five percent earmarked for staff. The value of the transaction: that's put at between 354 and 488 million euros - depending on TAP's performance this year. That includes a 338 million injection by Gateway. But the government will receive only 10 million euros immediately and a possible further 140 million in two years, depending on future options. Although TAP's debts of more than one billion euros will be transferred to the new owners. James Bevan is Chief Investment Officer at CCLA. SOUNDBITE (English) JAMES BEVAN, CHIEF INVESTMENT OFFICER, CCLA, SAYING: ''It's an excellent deal for Portugal. They were always required to engineer a disposal as part of the rescue of their economy. They have managed not only to secure a price, but they have also managed to get an agreement to inject funding to address the debt challenges and also to provide 53 aircraft.'' TAP's history was most recently troubled by a ten-day pilots' strike last month. Unions - and the main opposition Socialists - are against its privatisation. But with the large amount of slots it holds on flights between Portugal and Brazil, TAP is seen as attractive to a Brazilian investor. Although some investors are wondering whether it might fall foul of EU rules which, generally, limit foreign ownership of companies to 49%.