TAAG Angola Airlines to be privatised before 2025
Since 2018, the Angolan state has committed to divesting from more than a hundred public and parastatal companies, most of which are loss-making and indebted, such as TAAG Angola Airlines. The aim is to limit state interference in the economy to what is strictly necessary, and above all to offer competitive conditions to the companies that have the greatest impact on the national economy.
If all goes according to plan, TAAG Angola Airlines should be privatised before 2025. This is what its president and general manager confided in an interview with the Spanish press agency EFE, this Sunday, June 12, 2022. However, according to Eduardo Fairen, for the moment there are no formal offers, no deadlines or concrete negotiations, but only expressions of interest from some large companies that wish to enter the capital of the Angolan public flag.
The Angolan government has been preparing the divestment of TAAG Angola Airlines for three years. In September 2018, Angolan President João Lourenço had adopted a decree transforming the airline into a limited company. This change in legal status was essential to open up the carrier's shareholding to the private sector. According to the first draft of the privatisation plan presented at the time, the government should proceed with a sale of shares to "one or more foreign airlines", as a "technical partner", capping its participation at 51% and 10% for the workers. In July 2020, another decree was signed reducing the carrier's capital from 700 billion kwanzas ($1.2 billion) to 127 billion kwanzas ($227 million).
It must be said that in recent years, TAAG Angola Airlines has not been helped by the health of the national economy, which is heavily dependent on oil revenues. The fall in oil prices and the devaluation of the local currency have severely affected its financial results. The health crisis, which began in 2019, has further eroded the company's cash flow.
Its future privatisation aims to make it competitive, so that it can compete with other airlines. This will mean expanding its network, including a greater international presence. The opening of its Luanda - Madrid route on 27 June is part of this approach. The Spanish capital will become the third European city served by TAAG Angola Airlines, after Porto and Lisbon in Portugal. The service to Paris (France) is also envisaged.
About 170 Angolan public companies are involved in the privatisation process under the Programme for the Privatisation of State Assets (PROPRIV). In August 2020, the Secretary of State for the Treasury, Osvaldo Victorino João, indicated that 14 national companies had been privatised in 2019. An operation that brought in 31 billion kwanzas ($52 million) for the government.
In the case of TAAG Angolan Airlines, the first step is to restructure the company, including cleaning up its administration, recapitalising it and modernising its fleet. This is the purpose of the appointment of a new director general and board of directors at the end of 2021.
