Émigré business leaders team up to ‘save’ national airline for Portugal and the Portuguese
At very much the 11th hour, Portuguese-born international business leaders have hatched a plan to keep flagship airline TAP ‘Portuguese’.
With the government already advanced in negotiations with likely purchasers (Lufthansa or KLM/Air France being the groups most mentioned), multimillionaire Paulo Pereira – a mogul of the hotels and food distribution sector – is making a case for NOT selling TAP to foreigners, or certainly not selling all of it.
And while no government has shown any confidence in recovering the billions of euros invested by the state (ergo taxpayers) in maintaining the airline through thick and thin, Pereira believes this is absolutely possible.
How? He has “the management champion of the world” (his words) in his corner, every bit as convinced as Pereira that TAP must be saved for the country and its people.
Enter Carlos Tavares, the former CEO of auto giant Stellantis – a man whose reported salary used to be €36.5 million per year.
Tavares only broke with Stellantis earlier this month (with an eye-watering golden handshake, by all accounts), thus the ‘plan’ he and Pereira had been formulating has been ‘accelerated’.
The pair are due to meet with prime minister Luís Montenegro “in the coming weeks” – which suggests nothing will be decided before the new year.
For Pereira, who divides his time between business ventures in France and Portugal, “TAP will not only be able to recover its profitability, it will also be able to repay the investments made by the state and return the money to the Portuguese taxpayer”. This could be the one sentence that gets this initiative ‘through the door’, as the last audit of the company showed it to be worth roughly a third less than the Portuguese state has ploughed into it.
There are also the ‘warnings’ already sounded by competitors in the sector. Ryanair boss Eddie Wilson, for example, has predicted that TAP will “shrink if Lufthansa buys it”.
Talking to Spanish news agency EFE in September, Wilson suggested that every airline that Lufthansa buys will be smaller in a few years. The Germans are “really good at extracting maximum price from people”, he said, saying this is why they bought Brussels Airlines, Austrian Airlines and Swiss, and never expanded.
The way Wilson reads Lufthansa’s interest in TAP is that the Portuguese company has a good market in South America, especially in Brazil. “Lufthansa can retain some of that (…) They’d be stupid not to, but the company won’t grow and will become smaller.”
These were comments a few months ago, and many things may have changed since then. The government, for instance, has intimated that it is open to retaining a state share in the airline, and this may be another ‘foot in the door’ for Pereira/Tavares.
According to LusoJornal, the Pereira/Tavares plan is already quite advanced. The former has reportedly been mobilising efforts, meeting with unions, airlines, administrations and politicians, while Tavares was planning his exit from Stellantis, which suddenly became ‘fast-forwarded’ at lightning speed on December 2.
The beauty of this multimillionaire double-act is neither are seeking to ‘make money’. They already have it. This is about their own feelings towards their country of birth, and how they want to ‘contribute’.
Paulo Pereira has said of Carlos Tavares: “He can already see himself in Santarém, on a tractor, or in the vineyards of the North. He doesn’t need TAP to live, but he wants to make a difference.”
Much more importantly, both men promise a new form of vision.
“A new era in public management is needed,” Pereira tells LusoJornal. “In Portugal, public management works badly. There are no leaders, there are no bosses, there are only political orientations, which change depending on whether the government is right-wing or left-wing.”
He stressed: “Portugal doesn’t just need revenue”, it also needs “grey matter”, adding “speculative investment by certain foreign investors doesn’t bring any added value to the country”. This could be interpreted as ‘a bit of a low blow’, but it is equally very apt.
In short, tourism is Portugal’s “oil, it represents 15% of GDP, and we can’t leave this tool in the hands of foreigners”, says Pereira.
“The proposal is clear,” concludes LusoJornal. “Keep the state as a shareholder and ensure that Carlos Tavares implements an efficient management model.” For Paulo Pereira, “putting TAP at the top is a patriotic goal, shared by all Portuguese people”.
That could be going a little too far. Suffice it to say, ‘all Portuguese people’ are fed up to the back teeth with ‘dramas’ that have unfolded in recent years at TAP; with the enormous sums of money that the state has seen fit to plough into it – and with the service often provided (which has been the brunt of many passenger complaints). They would all love to see a TAP to be proud of, a TAP that returned some of the money it has gobbled up over the years and a TAP that flies the flag for this country.
Carlos Tavares’ business past
Carlos Tavares began his career in 1981 at Renault, in France, as a test-driving engineer. He rapidly progressed within the company, becoming the director of the Renault Mégane II project, then programme director at the Renault-Nissan Alliance, then VP.
By 2009, he was overseeing Nissan’s presence in North and South America. There was a stint as COO (chief operating officer) back at Renault, before moving on to the PSA group, as CEO, and returning it to profitability after years of financial losses.
At PSA, he oversaw the merger with Fiat Chrysler Automobiles which resulted in Stellantis, where he was CEO until very recently. His departure from Stellantis has been described as a difference of opinions. Tavares had the foresight in 2021 to warn about an “invasion” of Chinese EV companies, along with those manufactured by Tesla.
Tavares has been a member of various boards of directors, including Airbus (between 2016-2022).
By NATASHA DONN
