TAP posts €99.2mn first-half loss as fuel costs bite

TAP Air Portugal reported a first-half 2026 net loss of $116mn (€99.2mn), 40 per cent wider than the $83mn (€70.7mn) deficit in the same period a year earlier, as an 18.7 per cent rise in fuel procurement costs driven by Middle East geopolitical instability outweighed record passenger revenue and the airline's strongest demand performance in its 80-year history.

Operating revenue rose 4.3 per cent year-on-year to $2.39bn (€2.04bn) in the first half, with passenger revenue up 4.4 per cent to $2.14bn (€1.83bn) as TAP carried a record 8.2 million passengers, 4.2 per cent more than in H1 2025, across 57,500 flights. Load factor rose 3.4 percentage points to 85.4 per cent as traffic grew 5.9 per cent against capacity growth of 1.7 per cent; the widening gap confirms that yield quality rather than volume was the primary commercial driver.

The second quarter produced a net loss of $68.8mn (€59.3mn), reversing a $44.4mn (€38.3mn) profit in Q2 2025; fuel costs rose 52.3 per cent in the quarter alone, reflecting both sustained jet fuel elevation since the Iran conflict and the timing of TAP's forward purchasing. Chief executive Luís Rodrigues said the impact of fuel prices on operating costs had been immediate while the effects of revenue optimisation measures became apparent only gradually, since the majority of Q2 tickets had been sold before the energy cost increase materialised.

The results arrive at a particularly delicate moment for TAP: both Air France-KLM and Lufthansa Group submitted binding offers for a 44.9 to 49.9 per cent stake on 29 July 2026, valuing the whole carrier at approximately $1.66bn (€1.5bn), with the Portuguese government expected to announce its decision before the end of September. Whoever wins will inherit an airline with record demand and a young, all-Airbus mainline fleet of 101 aircraft, at the worst fuel cost moment in more than a decade.

TAP completed a $407mn (€350mn) senior notes issuance during the semester, with cash and cash equivalents of $1.42bn (€1.22bn) at end June providing adequate near-term liquidity. The carrier also confirmed the completion of the EU-mandated restructuring plan and the launch of its 2026-2035 strategic plan, focused on long-haul route expansion and digital transformation.