Fernando Pinto: "TAP privatization must move forward with a good partner and good negotiation"

Fernando Pinto, former CEO of TAP between 2000 and 2017, said in Parliament this Wednesday that he believes "in the privatized company". "I think the privatization should go ahead with a good partner and good negotiation ", said the person in charge who led the airline in the 2015 sale to Atlantic Gateway of David Neeleman and Humberto Pedrosa.

For Fernando Pinto, " airports must also be private, but they must be well controlled and have a very strong monitoring system".

The former head of TAP was called to Parliament to provide clarifications on the conclusions of the audit by the Inspectorate-General of Finance (IGF) of the company's accounts, namely the coincidence of values ​​between the supplementary capital contributions that Atlantic Gateway committed to make to TAP in the acquisition of 61% (226.75 million dollars) and the value of the penalty assumed by TAP in the event of non-compliance with the agreements for the acquisition of the 53 aircraft.

Fernando Pinto argued that the deal to purchase 53 aircraft agreed by David Neeleman with Airbus "was good for Airbus and for TAP" . He explained that the legality of the process was confirmed by one of the largest law firms. "It was the comfort we needed", he said.

The former CEO said that TAP had already been in discussions with Airbus because it did not want the A350s. "That's when Neeleman came in and "made an excellent choice", with the 330 and 321 neo. The negotiation was good for Airbus, so much so that they agreed to put 226 million in TAP as an advance to save cash, but with the commitment to buy aircraft.

"It was good for Airbus and it was good for TAP. It saved TAP from a difficult treasury process ", he said, highlighting that whenever TAP entered the privatization process, the banks closed the financing.

Regarding the acquisition, in 2005, of Varig's maintenance company in Brazil (VEM) – which for years penalized the TAP group's accounts – Fernando Pinto explained that the rationale was to buy the Brazilian airline where he had been for 27 years.

"The reason we initiated the purchase through VEM and Varig Log was to gain time and to ensure that Varig would not die before we could buy it ," he said, explaining that TAP ended up giving up on the deal because "Varig started to have bigger problems."

"We did not invest a single cent of our own in the acquisition. The proceeds from the sale of Varig Log with a 20% profit helped pay for everything else" , he said, giving as examples the loan from the National Bank for Economic and Social Development (BNDES) , the advance from VEM, the investment in legal and investment bank expenses, as well as the 20% premium from Geocapital.

"We decided to stay in charge of maintenance because TAP's growth was already so great that we needed a maintenance support company and in Lisbon we were unable to grow due to the airport's limitations," he explained. The problem, he acknowledged, came later with the operation of that unit, which TAP tried to sell for years and which is now owned by United.

"Would I do it again? No. I would try to do it differently, but no one can predict the future," he concluded.