The partnership between Azul and TAP survived the forced departure of David Neeleman from the Portuguese airline, but the recent impasse between them could put an end to a highly beneficial mutual relationship.
All because the Brazilian carrier wants back 90 million euros from a loan made to TAP in 2016, when Neeleman was its main shareholder.
The agreement between them provides that the debt will be paid in 2026, however, Azul is demanding early payment of the adjusted amount amid the reprivatization process of the Portuguese state-owned company.
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In disagreement, Azul sued the loan trustee, which displeased TAP’s management. More seriously, the Brazilian airline threatened to end the broad code-share between them, which is strategic for distributing passengers in both countries.
The situation worsened on November 13, when TAP filed a lawsuit in the Civil Court of Lisbon to force Azul to comply with the agreement in advance.
Privatization in 2025
The deterioration in the relationship between the two partners occurs amid Azul’s financial difficulties, which is why it is seeking to strengthen its cash flow while renegotiating its debts.
In turn, TAP is about to be offered at auction in 2025. The change in control also motivated Azul to seek payment of the loan, fearing changes that would make it difficult to recover the money.
TAP is the largest foreign carrier operating in Brazil, with a very diverse flight network that benefits from its hub in Lisbon to continue its journey through Europe. Azul plays the opposite role, distributing TAP passengers throughout Brazil.
In other words, the end of the strategic partnership is disastrous for both. The two airlines became closer almost a decade ago when David Neeleman, founder of Azul, joined forces with Portuguese businessman Humberto Pedrosa in 2015.
At the helm of TAP, Neeleman modernized the fleet of aircraft with Airbus jets and made the airline more dynamic, but the Portuguese government decided to regain control years later.
