SATA Air Acores (SP, Ponta Delgada) has been granted European Commission (EC) approval for Portuguese state aid of EUR453.25 million euros (USD486.70 million) to enable the airline to finance its restructuring plans and restore its long-term viability.
EC Executive Vice-President Margrethe Vestager said the measure would ensure "the territorial continuity of the Azores islands with mainland Portugal and the European Union while allowing the return to viability of its regional air carrier SATA". "At the same time, the aid will enable SATA to reorganise its activity, by improving operations and schedules, and by reducing operating costs."
In April 2021, Portugal notified the Commission of its intention to grant restructuring aid to support SATA's restructuring plan for 2021-2025.
The support will take the form of a direct loan of EUR144.5 million (USD155.1 million) and a debt assumption of EUR173.8 million (USD186.6 million), totalling EUR318.25 million (USD341.27 million) to be converted into equity, and a State guarantee of EUR135 million (USD144.9 million) granted until 2028 for funding to be provided by banks and other financial institutions.
The aid depends on a restructuring plan that will see SATA divest its 51% controlling stake in Azores Airlines (S4, Ponta Delgada) and divestment of the ground-handling company. SATA's corporate structure will be reorganised, resulting in creating a new holding company that will replace SATA Air Açores and control its operating subsidiaries SATA Air Açores, Azores Airlines, and SGA. SATA will be banned from any acquisitions and will have a cap on its fleet until the end of the restructuring plan. Lastly, efficiency-enhancing and cost-cutting measures will be introduced to improve SATA's operations and schedules and reduce costs.
The Commission has also closed an in-depth investigation, opened on August 18, 2020, into past Portuguese state support to SATA. It found the airline had reimbursed three capital increases plus interests to the state. These included:
- EUR133 million (USD142 million) granted on August 18, 2020;
- EUR122.5 million (USD131.5 million) approved on April 30, 2021;
- Prolonged guarantees on loans authorised on November 5, 2021.
SATA has been in financial trouble since 2014, when the airline, wholly owned by the regional government of the Azores, began to record losses, exacerbated later by the impact of the COVID-19 pandemic.
Brussels' announcement was met with criticism from José Pacheco, the deputy leader of the right-wing Chega political party in the Azorian parliament. He said SATA should not be granted more state aid, given the context of poverty in the Azores. "This "does not make sense in a poor region like the Azores, where some people are earning EUR200 (USD214) a month," he said.
The parliamentary leader of the social-democrat Partido Social Democrata dos Açores (PDS) party, João Bruto da Costa, gave his assurances that there would be no collective dismissal process in the SATA group as a result of the restructuring plan, reported Jornal Açores 9.
