Operational Pressures Cloud TAP’s Outlook Despite Quarterly Profit

TAP Air Portugal says it is enduring “one of the most operationally difficult summers in recent years,” citing border control delays and mounting competition, despite reporting a second-quarter profit and expanding its fleet and network.

Forward bookings for 2025 remain broadly in line with last year despite higher capacity, although a “noticeable shift” toward shorter booking windows is impacting demand visibility. The airline, which is being partially privatized, says yield pressure is also expected to persist in key markets.

“After a challenging start to the year, TAP delivered a positive performance in the second quarter, with increased operations and higher revenues compared to the same period last year,” CEO Luís Rodrigues adds.

TAP posted net income of €37.5 million ($43.7 million) in the second quarter of 2025, reversing a loss in the first quarter, although the half-year result was still a net loss of €70.7 million. The first quarter loss was attributed in part to a 20-day strike by pilots at its Portugália unit and a later-than-usual Easter that pulled demand into the second quarter.

Operating revenue for the three months to June 30 rose 1.7% year-on-year to €1.13 billion, driven largely by a 3.1% increase in passenger revenue. Passenger traffic grew 4.5% to 4.4 million on a 4.8% capacity increase, while load factor improved 2.3 points to 85%.

TAP’s operations have been affected by infrastructure issues in Portugal, with airports in Lisbon, Faro and Porto experiencing congestion at passport control this summer that has caused long queues and missed flights. Ground handling strikes have also intensified pressure on the airline to maintain reliability.

“As we navigate one of the most operationally challenging summers in recent years, with severe border control constraints at Portugal’s airports significantly impacting our operations, we remain focused on ensuring reliable operations while working toward the continued advancement of the Portuguese aviation ecosystem,” Rodrigues says.

Despite these challenges, TAP is moving ahead with fleet renewal and network growth. Three new Airbus A320-family aircraft are expected to be delivered by the year-end, “contributing to a more efficient and sustainable operation.”

Additionally, the Star Alliance member has added several new routes, including flights connecting Lisbon and Los Angeles, becoming the airline’s eighth North American destination. The airline has also further advanced a strategy to grow long-haul service from secondary Portuguese gateways, adding Terceira, Azores-San Francisco, Porto-Boston and Faro-Funchal, Madeira.

TAP is the largest airline in Lisbon, accounting for 46.4% of seat capacity during August 2025, according to data from OAG Schedules Analyser. The airline is a leading carrier on South Atlantic routes, accounting for more than 25% of total capacity between Europe and Brazil. TAP serves 13 Brazilian cities, including secondary markets such as Fortaleza, Manaus and Recife. Beyond South America, TAP leverages its Lisbon hub to connect with Portuguese-speaking Africa and an expanding North American network.

However, competition in the Europe–Brazil market continues to intensify. Brazilian carrier Azul has added Recife-Porto and São Paulo Viracopos/Campinas-Porto routes, while LATAM Airlines Group has launched Fortaleza-Lisbon. Air France has also introduced Salvador, its fifth Brazilian destination.

Overall Brazil-Europe capacity this summer is up 11.1% year-on-year, while Portugal-Latin America capacity has increased by 9.7%. In the Portugal-Brazil market, airlines are offering around 2 million two-way seats for summer 2025, representing growth of 10.9% compared with last year.

In July, the Portuguese government formally approved the launch of a partial reprivatization of TAP, initiating a process that could see almost half of the national carrier sold. According to the government, 44.9% of TAP’s capital will be opened to one or more strategic investors, with a further 5% reserved for employees, in line with existing privatization legislation.

“Our priorities remain clear: to transform TAP into a sustainably profitable and attractive company by consolidating operational efficiency and financial sustainability,” Rodrigues says.

TAP has a fleet of 99 aircraft with 22 more on order—comprising 10 A320neos, 10 A321neos and two A330-900s.