Worried about your PIA? Portugal's president blocks TAP's privatisation
Business
Marcelo Rebelo de Sousa cites poor transparency and doubts about the future role of the state
LISBON (Web Desk/Reuters) – Many people around the world aren’t ready to dispose of the idea of a national flag even in the free market economies as such an airline represents national pride at a time when the current economic crisis, record-high inflation generating a cost-of-living crisis, has also strengthened the political forces which say that people can’t be left at the mercy of market forces.
Just check the romantic value of Pakistan International Airline (PIA) despite turning into a loss-making machine.
Governments in developed nations like Germany and Italy opted to get rid of Lufthansa and Alitalia respectively years ago as the free market became the sole mantra after the “End of History” thanks to the fall of Berlin wall, which meant that there was no need to absorb the financial losses caused by these airlines just for the sake of the nation’s honour.
But the process had started before the fall of Berlin Wall – a phenomenon best represented by Thatcherism.
However, not everyone followed the Thatcherism. France is perhaps the best example with Air France still intact while the Ethiopian Airlines is a profitmaking entity and still expanding despite being representing a Third World country from Africa.
Read more: Ethiopian Airlines and PIA: A tale of two Third World state-owned entities
As Pakistan is witnessing the PIA bleeding with its uncertain future, the people in Portugal too want to continue holding their profitable national flag carrier with pride.
In this connection, Reuters reported that Portugal's president on Friday blocked a government decree that kicked off the privatisation of airline TAP, citing poor transparency and doubts about the future role of the state, and demanded urgent clarifications so as not to delay the process.
President Marcelo Rebelo de Sousa said that TAP was bailed-out by taxpayers and has a strategic value for the country, so there must be "maximum transparency in the entire process".
The government approved the sale of at least 51 per cent of TAP a month ago and said it was committed to finding a partner airline that would boost its growth, Lisbon's hub and others airports.
TAP's privatisation has already attracted interest from Lufthansa, Air France-KLM and British Airways owner IAG.
Rebelo de Sousa said in a statement that the decree "raised multiple doubts" and he was returning it to the government, adding that his doubts "can be clarified without too much delay, without compromising the urgency of the process".
Prime Minister Antonio Costa said in a statement that the concerns would be "duly considered".
Rebelo de Sousa said he wants clarification on "the state's future effective monitoring and intervention capacity as the diploma doesn't expressly foresee or allow, in subsequent administrative decisions, any role for the state".
The president criticised the fact that the diploma allows TAP to "sell or acquire, even before the decision to sell, any type of asset, without the slightest precision or criteria", adding that "full transparency is not guaranteed".
TAP reported on Tuesday a 62 per cent jump in third-quarter net profit to a record 180.5 million euros ($191 million).
