The Portuguese government’s decision to grant national airline TAP a €1.2 billion (US$1.37 billion) rescue loan was approved by the European Commission’s competition authorities on Wednesday, June 10, which cited the carrier’s crucial role in the country’s tourism sector.
Portugal received a timely gift on its National Day, as the Commission concluded that the loan is in line with the bloc’s competition rules, despite TAP not qualifying for special treatment under the EU executive’s relaxed State aid rules.
According to the Commission’s State Aid Temporary Framework, only companies that were in sound financial health before the start of the coronavirus crisis are eligible for more lenient assessment.
TAP faced difficulties before the December 31, 2019, cut-off point and, according to Minister for Infrastructure Pedro Nuno Santos, the firm’s debt currently stands at around €800 million (US$912.5 million).
But the Portuguese government’s insistence that the airline will either reimburse the loan or submit a restructuring plan within six months – a crucial ask of the Commission, which will only approve time-limited bailouts – was ultimately convincing enough.
It adds to a growing list of airlines that will receive Brussels-approved aid, including Air France, Lufthansa, and SAS. TAP’s bailout could also be a positive sign for embattled carrier Alitalia, which was also in financial difficulty before the crisis began.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
UK Probes Lindab’s Acquisition of HAS-Vent Amid Fears of Market Monopoly
Apr 28, 2024 by
CPI
Shein Faces EU Regulations Over User Data
Apr 28, 2024 by
CPI
Google Fights Back Against US Antitrust Lawsuit
Apr 28, 2024 by
CPI
US Homeland Security Establishes Blue-Ribbon Board with Tech CEOs to Advise on AI
Apr 28, 2024 by
CPI
FTC Accuses Amazon Executives of Using Disappearing Messaging Apps to Conceal Evidence
Apr 28, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI