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Portugal's TAP records larger loss as competition and strike bite

The net loss of the Portuguese airline TAP in its first quarter increased by 20% compared to the same period last year, as aggressive competition at Portugalia and a strike of pilots at their low-cost carrier impacted revenue.

The airline reported on Friday a loss between January and the end of March. This period did not include this year's busy Easter holiday.

Luis Rodrigues, the Chief Executive of Portugalia, said that the beginning of the year had been "challenging". He estimated the impact of the strike of 20 days at Portugalia as well as the late Easter holiday to the operating results of the company at between 30 and 40 millions of euros.

Rodrigues stated that he was committed to turning TAP into "a sustainable, profitable and appealing company" despite the ongoing challenges of macroeconomic uncertainty and competitive pressure.

A strong competition, mainly in Brazil, resulted in a drop of 4.9% in the passenger revenue per seat-kilometre available for the third quarter.

The overall revenue fell by 4.5% to 823 millions euros.

TAP was long earmarked for privatisation. However, the process is once again stuck after the centre-right coalition led by the Democratic Alliance coalition, which had been in power since two months, collapsed.

After winning Sunday's election, the centre-right coalition has announced that it will sell TAP to Lufthansa, Air France-KLM, and British Airways owner IAG.

(source: Reuters)