The Portuguese airline TAP showed profits of 180,5 million euros between July and September.
According to an official statement, the company profited 230 million euros during the first nine months of the year. 180,5 were made during the last trimester, between July and September. The remaining 49.5, from January to June. This means a 364% increase from the first six months to the following three.
Given TAP’s history, this is encouraging news. During last year’s homologous period, the company presented losses of 90,8 million euros. These profits represent the first positive liquid result of these first nine months. According to the statement, it is a ‘historic’ win.
Note that whilst profit is an important financial metric, it cannot be the only metric used to assess whether a company is performing better than it was in the past, or is performing well.
To have an accurate picture of the actual state of the company, it is important to evaluate the profit in the context of an analysis that considers various factors. This holistic approach is what enables a more accurate assessment.
TAP was one of the first airlines to present accounts for the third trimester of 2023. Below we will report some of the values presented on those accounts. These values, being important assessment factors, will reiterate what the profits suggest.
In terms of revenue, during these first nine months of 2023, the company showed results of 3,2 thousand million euros. This represents a 30%, or 725 million euros increase when compared to the same period of the previous year.
The recurring EBIDTA (performance before amortizations, and without extraordinary effects) for these first nine months was 752,4 million. The last trimester alone accounts for 390,7 million euros, 110,7 more than what it was during the same period of 2022.
Moreover, in terms of passengers carried, the company flew 4,5 million during this last trimester. A 5,2% increase when compared to last year’s homologous period. In terms of flights operated, it had 5,7% more flights when compared to that same period.
Among the remaining activity indicators, the only one that did not show an increase was the ‘load factor’. This value corresponds to the occupancy of the aircraft and decreased by 2.2% when compared to last year. Notwithstanding, it is still above 80%, which is good.
Operational costs increased by 1,7% (982,2 million euros). This was due to the increase in the activity mentioned above, and to the increase in personnel costs, which was 60,5% when compared also to last year’s third trimester.
It is important to note that the company is returning the value of the wages to what they were prior to the cuts performed by the last administration. This means that it will have more satisfied workers. The degree of satisfaction is very important for the quality of the work performed.
TAP is doing better than it was, and the series of factors evaluated to provide the assessment show encouraging results. Not just in terms of the present, but also for what the future holds.
Note that TAP is a State-owned company, and is supposed to be privatized eventually. The process has already started.
The work done so far by the company’s new Chairman and CEO, who was appointed earlier this year, is visibly producing results. After managing the case of SATA Azores Airlines, Luís Rodrigues was chosen by the Portuguese Government to deal with TAP.
In very simple terms, the job was to fix the company and prepare it for the future sale. And, according to the results, so far, so good.