# Portugal airline TAP’s profit drops on forex losses, higher wage costs
Published: 2024-11-18
Category: Headlines
Category URL: https://business.express/category/headlines/
Meta Title: TAP reports 35% slump in Q3 net profit to $124 million
Meta Description: Learn how TAP, Portugal flag carrier, faced challenges leading to a 35% decline in net profit. Discover the impact on revenues and privatization plans.
URL: https://business.express/portugal-airline-taps-profit-drops-on-forex-losses-higher-wage-costs/

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LISBON (Reuters) – Portugal’s flag carrier TAP reported a 35% slump in third-quarter net profit on Monday to 118 million euros ($124 million), hurt by [foreign exchange](https://www.globalbankingandfinance.com/foreign-exchange-articles/ "foreign exchange") losses and a big jump in wage costs.

[Operating costs](https://www.globalbankingandfinance.com/tag/operating-costs/ "Operating costs") rose 6.5% at the airline, which is slated for privatisation, to 1.05 billion euros. That was driven by a 26% surge in wage costs after the reversal of pay cuts imposed under a tough restructuring plan following a pandemic-induced bailout.

The airline’s [operating income](https://www.globalbankingandfinance.com/how-to-calculate-operating-income/ "operating income") rose 2% to 1.284 billion euros on a 0.5% increase in passenger revenues. Passenger numbers rose 1.3% to around 4.6 million in the quarter and TAP said bookings for the fourth quarter were slightly higher than a year ago.

Chief Executive Luis Rodrigues said management was pleased with the performance, “despite the two major challenges we faced: the difficult situation of managing European airspace, and significant currency devaluations.”

TAP’s recurring earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 4.8% to 372 million euros and its EBITDA margin – a measure of profitability – fell to 29% from 31% a year ago.

Portugal’s new centre-right [government plans](https://www.globalbankingandfinance.com/mozambiques-government-plans-ahead-for-flooding/ "government plans") to resume TAP’s privatisation in 2025 and said it had received interest from over a dozen potential buyers, including Lufthansa, Air France-KLM and British Airways owner IAG.

($1 = 0.9465 euros)

(Reporting by Patrícia Vicente Rua; Editing by Andrei Khalip and Bernadette Baum)


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