Source: TAP

  • Accumulated positive net income of 118.2 million in the first nine months of 2024.
  • Operating revenues for the third quarter grow 2 percent compared to the same period of 2023, to 1,284 million euros.
  • In the first nine months of the year, operating revenues increased by 2.8 percent compared to the same period last year, to a total of 3,253 million euros.
  • Maintenance revenues stand out, which grew 40% in the first nine months of 2024.
  • Recurring EBITDA of EUR 744.8 million and recurring EBIT of EUR 377.8 million in September 2024, with margins of 23% and 12%.

Third Quarter 2024 Results

In the third quarter of 2024 (3Q24), TAP achieved a net profit of EUR 117.8 million, a decrease of EUR 62.8 million compared to 3Q23, due to the impact of foreign exchange losses. However, when compared to 3Q19 (before the pandemic), the result improved by EUR 116.6 million.

In 3Q24, compared to the third quarter of 2023 (3Q23), the number of carried passengers increased by 1.3%, while the number of flights operated decreased by 1.9%. Compared to pre-crisis levels in 2019 (3Q19), the number of passengers reached 91% and operated flights reached 84%.

Capacity (measured in ASK) increased by 1.2% compared to 3Q23, representing 97% of pre-crisis levels in 3Q19. The Load Factor reached 86.2%, improving by 1.4 p.p., when compared to the previous year, and by 3.3 p.p. when compared to pre-crisis levels.

Operating revenues totaled EUR 1,284.1 million, increasing by 2% compared to 3Q23, exceeding, and representing 123% of 3Q19 operating revenues. Ticket revenues increased by EUR 6.2 million (+0.5%) compared to 3Q23, totaling EUR 1,187.5 million, and generating a PRASK of EUR 8.07 cents – a decrease of 0.7% (-EUR 0.05 cents) when compared to 3Q23 and an increase of 32.4% (+EUR 1.98 cents) with 3Q19.

Maintenance revenues increased by EUR 15.8 million (+48.0%) compared to 3Q23, totaling EUR 48.7 million, mainly due to the increase in engine workshop activity. Cargo and Mail revenues increased by EUR 3.3 million to EUR 41.3 million, registering an increase of 8.6% compared to 3Q23, due to an increase in Load Factor, offsetting the decrease in cargo yields observed in the market.

Recurring operating costs totaled EUR 1,045.5 million, an increase of 6.4% or EUR 63.3 million compared to 3Q23. This variation is mainly due to the increase in personnel costs (+EUR 44.9 million or 26.3%) due to the new labor agreements, which took effect only in the fourth quarter of 2023, except for the agreement with the Pilots that came into force in 3Q23, and the increase in depreciation and amortization (+EUR 19.0 million or 16.6%).

These increases were partially offset by the decrease in traffic operating costs (EUR 19.7 million or 7.4%) due to the reduction in ACMI contracting and reduced costs with irregularities. Total CASK recurring operating costs increased by 5.2% (+EUR 0.35 cents), reaching EUR 7.11 cents, when compared to 3Q23. Excluding fuel costs, CASK recurring operating costs reached EUR 5.13 cents, increasing by 7% (+EUR 0.33 cents) compared to 3Q23.

Recurring EBITDA totaled EUR 372 million in 3Q24, representing a margin of 29%, decreased by EUR 18.7 million (-4.8%) compared to 3Q23. Recurring EBIT decreased by EUR 37.7 million (-13.6%) compared to 3Q23, totaling EUR 238.6 million, representing a margin of 18.6%.

Considering non-recurring items, EBIT amounted to EUR 227.2 million. Compared to pre-crisis levels, recurring EBIT and EBIT increased by EUR 108.7 million and EUR 98.6 million, respectively.

As of 30 September 2024, the Balance Sheet showed a robust cash and cash equivalents position of EUR 943.1 million, an increase of EUR 153.7 million compared to 31 December 2023. The net financial debt/EBITDA ratio improved to 2.3x compared to year-end 2023 (2.6x).

From an operational perspective, a new route from Lisbon to Florianopolis has been opened. The operational fleet consisted of 99 aircraft as of 30 September 2024, with the addition of one A320 NEO and the departure of 1 A319 CEO during the quarter, with 69% of the medium and long-haul operating fleet consisting of NEO Family aircraft (up from 68% as of 30 September 2023 and 33% as of 30 September 2019).

Luís Rodrigues, TAP’s Chief Executive Officer, says that “we are pleased with our performance in the third quarter of 2024, despite the two major challenges faced: the difficult situation of air traffic management in Europe, and the significant currency devaluations. The improvement in punctuality and NPS (Customer Satisfaction Index) and the stabilization of regularity confirm a more robust operation with a better service for our customers, resulting in increased revenues and consolidation of operating results.”

“Additionally,” – continues the CEO – “the success of the senior notes offering, with a clear creation of value for TAP, given the significant reduction of the implicit spread, resulted from a positive response by investors to the Company’s financial performance.”

“Despite the current challenging context of the sector, we remain focused on transforming TAP, with the support of our people and stakeholders, into a sustainably profitable airline and one of the most attractive companies in the industry”, concludes Luís Rodrigues.

Cumulative Results as of September 30, 2024

In the first nine months of 2024, TAP carried a total of 12.3 million passengers, which represents an increase of 1.5% compared to the previous year, reaching 95% of the values achieved in 2019. The total number of flights operated decreased by 1.1% compared to the same period last year, reaching 87% of pre-crisis levels.

Capacity continues to exceed pre-crisis levels, reaching 103%, representing an increase of 2.3% compared to the first nine months of 2023 (9M23). The Load Factor increased by 1 p.p. year-on-year, reaching 82.9% in 9M24, also improving by 2 p.p. compared to the first nine months of 2019 (9M19).

In 9M24, operating revenues totaled EUR 3,252.6 million, which represented an increase of 2.8% compared to 9M23 and an increase of 30.6% compared to 9M19, driven by an increase in capacity (+2.3%) and better load factor (+1 p.p.), in ticket revenues, and by a significant increase in activity in maintenance revenues (+39.8%).

PRASK in 9M24 reached EUR 7.29 cents, having decreased by 0.5% (-EUR 0.04 cents) when compared to the same period in 2023 and increased by 29.7% (+EUR 1.67 cents) when compared to 2019.

Recurring operating costs increased by 4.0% to EUR 2,874.9 million. CASK of recurring operating costs increased by 1.7% to EUR 7.11 cents, compared to 9M23. Excluding fuel costs, it reached a unit value of EUR 5.11 cents, increasing by 4.4% when compared to 9M23.

In financial terms, Recurring EBITDA reached EUR 744.8 million in 9M24, with a margin of 22.9%, decreasing by EUR 7.6 million or 1.0% compared to 9M23. Recurring EBIT totalled EUR 377.8 million in 9M24, with a margin of 11.6%, EUR 23.0 million less or 5.7% than in 9M23.

Accumulated net income totaled EUR 118.2 million, decreasing by EUR 85.3 million compared to the previous year, having been impacted by foreign exchange losses. When compared to 2019, it registered an increase of EUR 229.0 million.

As of September 30, 2024, the Group had a strong liquidity position of EUR 943.1 million, an increase of EUR 153.7 million compared to the end of 2023. In addition, there was an improvement in the Financial Debt to EBITDA ratio, reaching a level of 2.3x, when compared to the ratio of 2.6x at 31 December 2023, reinforcing the stabilization of TAP’s financial deleveraging metrics and disciplined financial management, with the aim of inspiring confidence in our investors.

For the fourth quarter of 2024 (4Q24), reserves are slightly above the previous year, and are expected to offset some pressure on yields. In November, the issuance of senior notes in the amount of EUR 400 million with a coupon of 5.125% was successfully concluded, which allows TAP to optimize its financial structure and meet the commitments of the Restructuring Plan. In 4Q24, investment in the Brazilian market continues, with the opening of the new route to Manaus, as well as investment in fleet modernization, with the delivery of two new A320 NEO aircraft, replacing two aircraft from the A320 CEO family. Finally, the commitment to the strategic roadmap will continue.