Airbus Funds. “It was good for Airbus and it was good for TAP”, says former CEO Fernando Pinto

The TAP capitalization deal carried out through funds advanced by aircraft manufacturer Airbus was “good for Airbus and it was good for TAP”, said the company’s former CEO. Fernando Pinto was TAP’s CEO in 2015 when the operation was closed with private shareholder David Neeleman and admits that, initially, he had the same reaction when he learned that the entry of funds into the company, as part of the privatization, would be supported by Airbus.

“We had the same reaction of questioning how it would be done” and we took our doubts to the Government and Parpública, who carried out a legal analysis on whether the operation would be acceptable. The manager is being heard by the Economy and Public Works Committee regarding the audit by the General Inspectorate of Finance (IGF). The very detailed analysis carried out by VdA considered that the operation was valid, as long as the planes were sold at market prices and if it was approved by TAP’s supervisory board.

“It was the comfort we needed” and the process went ahead. Fernando Pinto recalls that at the time TAP had a contract with Airbus to buy 12 A350 aircraft at “excellent value conditions”, but this model turned out to be a very heavy aircraft that “wasn’t suitable for us”. TAP was already negotiating an alternative with Airbus — and at risk of defaulting on payments.

“And then David Neeleman came in,” he knew about the process and proposed an exchange for A330 Meo aircraft and A321, an “aircraft that was made for TAP. It’s a money maker . It’s always full. It was an excellent choice and the negotiation was so good for Airbus, because the manufacturer wanted to sell the A350 aircraft to the American market, that they agreed to put 228 million dollars in TAP, an advance to save the treasury, but demanded a commitment to buy the aircraft. It didn’t make sense to lend the money and TAP back out.”

Was TAP bought with the dog's fur? “No”. For Fernando Pinto, the operation of the so-called Airbus Funds “was good for Airbus, and saved TAP” and avoided a cash flow shortage because whenever the company entered the privatization process, the banks closed the door.

The former CEO of TAP, who left the position in 2017 with the American businessman already in private management (in association with Humberto Pedrosa), also believes that Portugal has to thank David Neleeman also because he brought American tourists to Portugal.