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Portugal’s TAP asks for state-backed loan to survive coronavirus

LISBON (Reuters) – Portugal’s flag carrier TAP <TAPA.UL> has asked for a state-backed loan to aid the survival of the company, which is at its most fragile since it was founded, board Chairman Miguel Frasquilho said in a parliamentary hearing on Thursday.

“TAP has addressed a bid for support to the Portuguese state,” Frasquilho said, adding he hoped the company would get a response from the government very soon.

A TAP spokesperson declined to specify the figure.

The airline was partly privatised in 2015. Brazilian-U.S. airline entrepreneur David Neeleman holds a 45% stake, and the state 50%, with TAP employees holding the remaining 5%.

The airline, which Frasquinho said was “at its most delicate” since its founding 75 years ago, has also asked to be exempt from or allowed to postpone various tax payments.

TAP ended last year with its best ever cash position, despite a net annual loss of 106 million euros ($115.24 million).

It has incurred heavy losses as demand for travel collapsed because of restrictions to curb the spread of the novel coronavirus.

The company temporarily laid off 90% of its 10,000 employees in the first week of April.

Both Prime Minister Antonio Costa and Finance Minister Mario Centeno raised the possibility of nationalising the country’s flag carrier earlier this week, with Costa deeming the company essential to the country.

Portugal has reported 18,091 confirmed cases of the new coronavirus and 599 deaths, a small fraction of neighbouring Spain’s toll.

The country is expected to extend its state of emergency by a further two weeks on Friday.

(Reporting by Victoria Waldersee, Catarina Demony and Patricia Rua; editing by Barbara Lewis)

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