Brussels-EU competition regulators investigate whether the € 3.2 billion ($ 3.8 billion) restructuring plan afflicting the Portuguese airline TAP is proportional and compliant with EU national aid regulations, The European Commission said on Friday.
Overhaul plans include approximately 2,000 headcount reductions by 2022, up to 25% wage cuts, fleet cuts, and the sale of non-core assets.
The EU Watchdog said it would investigate whether TAP or market operators would make a significant contribution to restructuring costs and whether measures would be taken to offset the negative impact on competition.
The European Commission also provided a € 1.2 billion ($ 1.4 billion) bailout loan to TAP after the second highest court in Europe revoked approval in May because regulators did not provide a good reason. Re-adopted the previous decision to clear.
Rival Ryanair has challenged the TAP rescue loan, which is part of a € 3.2 billion ($ 3.8 billion) restructuring aid and will be converted to equity.
The Portuguese Ministry of Infrastructure said the EU’s investigation will focus on assessing compliance with the rules for helping hard-to-help companies.
In a statement, the ministry said, “This is an important step for the Commission to strengthen. That is, from a legal point of view, the future feasibility of TAP without relying on public resources. It is a solution that may be found to ensure that. “
Fu Yun Qi