In a note released today, the airline reveals that between July and September it recorded “a historic record of operating revenues”, which amounted to 1.1 billion euros, “exceeding pre-crisis levels by 7.5%”, which which allowed it to achieve “unprecedented financial performance”.
This result, the note indicates, was “driven by strong operating results and positive effects from the implementation of the currency hedging policy”, which also “reduced the currency impact of the previous quarters of 2022”.
“This situation is related to TAP’s current financial risk management strategy, which aims to reduce the volatility of the impacts of exchange rate variations on the Income Statement. Even excluding the aforementioned improvement in the currency hedging policy, the net result remains positive at 31.8 million euros.
In the information released today, the president of TAP, Christine Ourmières-Widener, says that the company “is confirming the solidity of its performance in the third quarter, with all financial metrics above pre-crisis levels, despite the increase in costs of fuel”.
Demand for the 4th quarter “remains quite strong, supporting expectations of a good accumulated result until the end of the year”, says the manager, adding: “Visibility for next year is, however, still limited and , given the uncertainties of the current situation, it is increasingly crucial that we maintain focus on our strategic plan, which has, so far, proven to be effective.”
The information disclosed also mentions that the liquidity position of the Portuguese airline “is solid”, with 775.1 million euros in cash and equivalents at the end of the quarter.
“The next decisive steps to take are: to carry out productive discussions with our labor partners for the creation of more modern Collective Bargaining Agreements, to improve our operations and the quality of our service with the involvement of all the ‘stakeholders’, the constant negotiation of all our contracts with third parties and the careful preparation for the coming year”, says Christine Ourmières-Widener.
The data released indicate that the number of passengers transported in the 3rd quarter doubled compared to the same period in 2021, reaching 85% of the levels of the same period in 2019.
“Additionally, during this period, TAP operated one and a half times the number of flights in 2021, or 81% of departures in 2019”, adds the company.
Operating income was 2.5 times higher than in the same period last year, increasing from 657.3 million euros to 1,118.9 million, representing 107% of operating income in the 3rd quarter of 2019.
“This situation was predominantly driven by the increase in tariffs and greater capacity, resulting in an increase in revenues from the passenger segment” by 633.4 million compared to the 3rd quarter of 2021, to 1,001.9 million.
The airline also mentions that the Maintenance and Cargo segments contributed to the increase in revenues with 33.9 million and 7.2 million, respectively.
Recurring operating costs amounted to 966.2 million, increasing 97.4% compared to the same period last year.
The company also recalls that fuel costs more than tripled, increasing by €269.9 million on an annual basis to €371.9 million.
“Despite having generated a positive effect of 15.9 million euros, the hedging strategy only managed to marginally reduce the effect of higher jet fuel market prices, which contributed 153.0 million euros to the increase in fuel costs”, he adds.
SO // ROC
