[1/2] A TAP Air Portugal aircraft takes off from Dublin Airport, in Dublin, Ireland, March 26, 2021. REUTERS/Clodagh Kilcoyne/File Photo
LISBON, June 1 (Reuters) – Fresh from turning round Portuguese airline SATA, Luis Rodrigues now has to do it again – and more – after he was picked by the government to lead troubled flagship carrier TAP as it readies for privatisation.
The process could start as soon as next month, so there’s no time to lose.
At least three global majors, Lufthansa (LHAG.DE), Air France-KLM (AIRF.PA) and British Airways owner IAG (ICAG.L), have shown an interest.
But Rodrigues will need to reassure investors that TAP has turned a corner after a series of scandals, and mend fences with unions, which are demanding a reversal of the 20% pay cuts that remain after the airline nearly went bust in the pandemic.
A source close to the 58-year-old said he was “very confident” about the challenge ahead and had spent his first six weeks at the helm studying the books, making internal organisational changes and negotiating with labour leaders.
Before starting at TAP on April 14, he told reporters he would address “without taboos” issues with the unions, and he met them just a week after taking over.
Tiago Faria Lopes, head of pilots’ union SPAC, described the meeting as “constructive”.
He said Rodrigues took lots of notes, expressed concern about the current state of TAP, but also said he expected tensions between the company and unions to ease.
TAP declined to comment for this story or provide Rodrigues for interview.
CALM FOCUS
In a sign of his popularity at SATA, about a hundred employees in October signed a petition asking the Azores’ regional government to reappoint Rodrigues as CEO when his term was about to expire.
He was reappointed in December, but by March had been lined up by Lisbon to take over at TAP.
People who have worked with him agree he is a good fit given his knowledge of TAP and the industry, his calm manner in a crisis and good communication skills.
“He is the right person to lead TAP as his core leadership skills are being a good listener and a focussed doer. It is what TAP needs,” said Daniel Traca, professor and ex-dean at Nova School of Business & Economics, who in 2014 convinced Rodrigues to lead its Executive Education area.
He has held executive positions in media, telecoms and advertising companies and served as a TAP executive director in 2009-2014.
At SATA, his pandemic-recovery strategy bore fruit: passenger numbers soared 67% to over 1 million in 2022, revenue almost doubled and the airline swung to a core profit from a loss in 2021, while its net loss shrank.
Ricardo Penarroias, head of cabin crew union SNPVAC, said workers welcomed his appointment at TAP but he must act quickly ahead a busy summer.
“There is a problem, though: dissatisfaction among workers is so great, after the painful measures taken by the previous management that we can’t give the new CEO as much time (without strife) as he had at SATA,” he said.
In exchange for approving a 3.2 billion euros ($3.5 billion) state bailout, Brussels in late 2021 backed a tough restructuring plan for TAP, including reducing its fleet, eliminating thousands of jobs and cutting wages.
Union leader Faria Lopes said that was justified when COVID-19 restrictions crushed the industry, but with demand now surging, “TAP is cancelling flights due to a lack of available pilots and crews”.
TAP more than halved its first-quarter losses as passenger numbers exceeded pre-pandemic levels.
Faria Lopes said previous management did not adequately prepare for the summer, with at least 50 pilots still required to guarantee normal operations.
Rodrigues will also need to persuade investors that TAP can free itself from sometimes ham-fisted government interference.
His predecessor, Christine Ourmières-Widener, was fired after an irregular severance payment to a former board member.
“To achieve results, Rodrigues has to do the same he did at SATA and put an end to the government’s constant meddling in the management of TAP,” union boss Penarroias said.
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Reporting by Sergio Goncalves Editing by Andrei Khalip in Lisbon, and Josephine Mason and Mark Potter in London
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