TAP Portugal Cuts Q1 Losses as Revenue Rises, Fuel Costs Expected to Climb
Financial Performance and Outlook for TAP Portugal
Q1 Losses Narrowed Significantly
LISBON, May 25 (Reuters) - Portugal's airline TAP said on Monday its first-quarter loss narrowed 63% from a year ago to €39.9 million ($46.5 million) on higher revenue, but warned that rising jet fuel prices due to the Iran conflict will weigh in coming quarters.
Mitigation Strategies for Rising Fuel Costs
• The flag carrier, which is being partially privatised, said the expected impact of jet fuel prices should be somewhat mitigated by capacity management, cost controls and pricing adjustments through a fuel surcharge.
Revenue and Passenger Growth
Revenue Breakdown
• Revenue rose 11% to €914 million, driven mainly by a 10% increase in passenger revenue to €810 million and a 32% jump in aircraft maintenance revenue, alongside capacity growth.
Passenger Numbers and Load Factor
• 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.
Operating Costs and EBITDA
EBITDA Improvement
• EBITDA reached €92 million in the first quarter, reversing a negative €9.5 million a year earlier.
Cost Structure Analysis
Jet Fuel and Staff Costs
• Operating costs remained broadly stable at around €954 million, with jet fuel costs still down 16% to €196 million in the quarter, but staff costs rising 9% to €252 million.
($1 = 0.8590 euros)
(Reporting by Sergio Goncalves; editing by Andrei Khalip, Kirsten Donovan)
