LONDON – The Azores Government has announced that it will begin the public tender for the privatization of Azores Airlines by January 2023.
Restructure First, Sell Thereafter…
This move was announced by the Regional Secretary for Finance, Planning, and Public Administration, Duarte Freitas:
“I can announce that as of Jan. 1, 2023, we will begin the public tender process to sell Azores Airlines”.
Freitas also added that the airline will be restructured before selling its majority stake in the carrier:
“I can announce that the corporate restructuring of the SATA Group will be completed at the beginning of December, creating a holding company that will make it possible to separate the various companies, isolating SATA Air Açores from pernicious contagions and making it possible to sell Azores Airlines”.
Freitas also stated that no more public funds would be invested into the carrier:
“These were unrepeatable expenditures, so the 641 million euros provided for in the 2023 Plan have been purged of these amounts which, together with guarantees, served to save SATA from the disaster it was led to in the past”.
This is especially due to the fact that 453 million EUR of Portuguese state aid has already been approved by the European Commission.
Will This Tender Attempt Fail?
The Herald News reports that this tender will be another attempt to get the carrier privatized following two failed attempts.
The first attempt happened in November 2018, with that tender canceled, and then one in June 2020 when the Azores Government abandoned it due to the COVID-19 pandemic kicking into gear.
Such a tender will have to happen and go through, as it was placed as a stipulation by the European Commission on condition of the state funding being approved.
The Azores Government currently owns a 51% stake in the carrier.
About Azores Airlines…
Azores Airlines was founded in 1990 as OceanAir. By 1998, it became SATA Internacional, and by 2015, it became Azores Airlines. It commenced operations in 1998.
The airline currently has a fleet of eight aircraft, consisting of three Airbus A320s and five A321neos, with the airline serving 19 destinations being:
- Hamilton (Seasonal)
- Montreal (Seasonal)
- Toronto
- Praia
- Paris CDG (Seasonal)
- Frankfurt (Seasonal)
- Madeira
- Horta
- Lisbon
- Pico
- Porto
- Santa Maria Island
- Lajes
- Barcelona El Prat (Seasonal)
- Bilbao (Seasonal)
- Gran Canaria
- Boston
- New York’s JFK
- Oakland (Seasonal)
Overall…
All eyes will be on the Azores Government to see whether they can get this tender pushed through in 2023 and whether, in fact, they can find a suitable buyer for the carrier.
Based on what Freitas has said, this does appear to be a tall order with a relatively short deadline, especially if no more public funds are going to be inserted into the carrier.
This carrier does provide a substantial connection point for those who live in the far Portuguese islands, but given the current economic climate at present, someone needs to come forward and buy it; otherwise, Azores Airlines could go under.
