Could the tap run dry at Montijo? Portuguese national carrier declines to use Lisbon’s new airport, when it is built

TAP Air Portugal’s CEO Antonoaldo Neves has stated that TAP will not use the Lisbon Montijo Airport following its conversion from a military base by 2022 in order to maintain a hub structure at Humberto Delgado Airport (LHDA). He said: “I’m in favour of Montijo but don’t want to use it… I wish all the best for Montijo, as soon as possible”. Mr Neves maintained that LHDA is “totally exhausted” of its capacity.


Summary:

  • TAP Air Portugal’s CEO has stated that the flag carrier will not use the Lisbon Montijo Airport;
  • The new airport will be converted from its existing military use by 2022 and bring much needed capacity into the Lisbon airport system;
  • TAP’s CEO Antonoaldo Neves says he is in favour of the airport, but wants to maintain its hub operation at current Humberto Delgado Airport;
  • The pace of growth in tourism demand in Lisbon means it is no longer a replacement airport discussion but a future ‘Portela plus Montijo’ strategy.

Mr Neves has also recently said that his company is completely against co-financing the new airport, despite the urgency required to build the facility. He said if the airport requires the airline to co-finance the facility, TAP will look at court action. It is not clear what “co-financing” means. It probably refers to the raising of charges at LHDA on the airlines, of which TAP is the largest by seat capacity and movements and would naturally bear the greatest burden.

CHART – TAP Air Portugal is the largest operator at Lisbon Humberto Delgado Airport, but LCCs have an increasing presence in the Portuguese capitalSource: CAPA – Centre for Aviation and OAG (data: w/c 01-Oct-2018)

One might argue that the LCCs, who collectively have over 22% of both the movements and seats, should be the ones being leveraged to help pay for Montijo’s conversion if anyone has to, as they are the ones more likely to be using the facility allowing LHDA’s full-service hub status can be retained.

It is less likely to refer to TAP actually being asked to put its hand into its pocket and actually become an investor in the airport, even if such activities are gaining in frequency in some other countries.

The issue has gone quiet this year while an environmental report was prepared. As this article is written Portugal’s Prime Minster, António Costa, said the government and airports operator, ANA (now controlled by Vinci), will press ahead with the new airport, hinting that it will happen, whatever the environmental report concludes, a fait accompli.

READ MORE… CAPA members can view this report form last year… Lisbon Humberto Delgado Airport considers ‘annexing’ another airport to solve capacity shortage

Mr Costa said the government merely awaits the environmental impact study before giving the green light to the ‘Portela plus Montijo’ project – Portela being the original name for LHDA. There is a suggestion that he wants to act quickly, before the national mood turns against the Montijo project.

At a tourism conference in Lisbon he spoke of the need “to correct today the mistake that was made ten years ago that means we don’t already have the second airport we needed.” This was a reference to the Ota airport project, to the north of Lisbon, which was supposed to replace LHDA.

A year ago, the Government signed an agreement with ANA that defined a strategic option, to keep operating LHDA but to aim for growth with a new airport in Montijo, which is south of the Tejo (Tagus) river but near enough to serve Lisbon.

Mr Costa clearly believes that with LHDA one of the most physically constrained in the world, together with the pace of growth in tourism demand (+16.1% in 2017, the fourth consecutive year of double-digit growth), there is no solution other than ‘Portela plus Montijo’.

“A positive environmental report will make the Montijo decision absolutely irreversible”, he said, adding: “After the country has torn up decades of studies and alternatives to the site, we cannot now waste time and, above all else, we cannot allow time for the national consensus to be exhausted once again. That is why we have to decide, we must move forward and we must do it.”

Mr Costa wants tourism revenues to reach 10% of Gross Domestic Product, the average in the EU’s member countries, while Portugal currently is at 8%.