Portugal, private investors agree to share control of TAP airline

Lisbon

THE new Portuguese government and a private consortium that bought a 61 per cent stake in flag carrier TAP last year have agreed in principle to give the state a larger stake and share control of the airline, leaving it under private management.

After long and uneasy negotiations that began when the Socialist government took over in November, promising to regain control of the indebted airline, the sides signed a memorandum of understanding on Saturday under which the state will pay 1.9 million euros (S$2.98 million) to lift its stake to 50 per cent from 34 per cent. "This is a 50-50 deal, under which the company will be privately managed," said Humberto Pedrosa, the Portuguese partner in the consortium led by American-Brazilian aviation tycoon David Neeleman, founder of US budget airline JetBlue and owner of Brazil's Azul.