TAP loss widens as fuel costs jump before sale

TAP Air Portugal reported a net loss of €99.2 million for the first half of 2026, representing a deterioration of about 40% compared with the same period in 2025. The figures indicate that the airline has come under renewed financial pressure despite achieving moderate revenue growth and record passenger volumes over the period.

The first-half performance underscores the challenge of managing rising costs in a competitive market, with the airline’s financial results weakening even as demand for its services increased. The loss emerges at a sensitive time for the company as it advances toward a planned part-privatization.

Fuel costs were a central driver of the weaker results. TAP said fuel expenses rose 18.7% in the first half of 2026 and accelerated sharply in the second quarter, when they jumped 52.3% year on year. The airline identified this surge as a main factor behind the deterioration in profitability.

On the revenue side, TAP recorded growth of about 4% in the first half of 2026. The carrier also transported a record 8.2 million passengers during the period, highlighting solid demand and increased traffic volumes across its network.

However, the combination of rising fuel prices and limited short-term pricing flexibility meant that these positive volume and revenue trends did not translate into improved earnings. The airline noted that much of its second-quarter capacity and ticketing had been sold before the rise in fuel prices, constraining its ability to pass higher costs on to customers immediately.

The record 8.2 million passengers carried in the first half of 2026 indicate that TAP has continued to expand traffic and utilize its network as travel demand recovers. Higher passenger numbers contributed to the 4% increase in revenue, supporting the company’s top line even as costs climbed.

Despite these operational achievements, the financial outcome shows that improved load factors and network performance alone are insufficient to offset rapid input-cost inflation. The results highlight the importance for TAP of managing fuel exposure and adapting its commercial strategy as market conditions change.

The publication of the first-half results coincides with a key stage in TAP’s privatization process. Two European airline groups, Lufthansa (LHAd) and Air France–KLM, have submitted binding offers to acquire a stake in the company, and these proposals are currently under review by the Portuguese government.

The state plans to sell up to roughly half of TAP’s capital, with figures reported as up to 49.9% or 49.99%. As part of the transaction structure, an initial 5% allocation of shares has been reserved for employees, giving staff a direct stake in the company’s future ownership.

Authorities expect to select a preferred bidder in early September 2026, marking an important milestone in reshaping TAP’s shareholder base. The decision will follow an assessment of the competing offers and comes against the backdrop of the airline’s renewed financial losses and ongoing efforts to improve its performance.