LISBON (Reuters) - Portugal’s flag carrier TAP on Monday suspended 2,500 flights scheduled for March-May, after cancelling 1,000 flights for this month and next on Thursday, citing a fall in demand for travel due to the coronavirus outbreak.
The 3,500 groundings account for 7% of TAP’s scheduled flights this month, 11% in April and 19% in May.
TAP said on Thursday it expected its revenues to be impacted by the coronavirus crisis and it was suspending non-critical investment and evaluating cost cuts. [nL8N2AY6Z2]
It said on Monday it would contact all affected passengers to “find the best options and alternatives”, adding it was waiving ticket alteration fees for flights booked between March 8 and 31.
Industry experts say the coronavirus will likely accelerate a shakeout in Europe’s overcrowded airline industry, ultimately benefiting a few big players such as Ryanair and British Airways owner IAG, while smaller companies such as Norwegian Air, SAS, Alitalia and TAP may struggle. [nL8N2B252K]
Asked to comment about potential cash difficulties due to the virus epidemic, TAP told Reuters it was “successfully implementing its post-privatisation transformation plan” and had a “solid shareholder base”. TAP was partially privatised in 2015. The state still holds a 50% stake.
TAP also said it ended last year with its best cash position ever, despite posting a net loss of 106 million euros, and had also reduced operating costs and slashed this year’s debt repayments by 70% after recent renegotiation and extension of debt maturities.
Reports in the German media last month said Lufthansa and United Airlines were considering taking over TAP. [nL5N2AQ6MF]
Portugal has so far reported 35 cases of the coronavirus, far below around 1,000 cases in neighbouring Spain.
Reporting by Andrei Khalip; Editing by Mark Potter
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