Transportes Aéreos Portugueses SA (TAP) has been rated for the first time by international credit agencies and is now positioned among a select group of financially sustainable companies in the global airline sector. The rating obtained is a key element in continuing the process of extending debt maturity, enabling TAP to solidify its financial strength. This rating reflects the earnings recovery trend observed in the second and third quarters of 2019.

The corporate structure of TAP-Transportes Aéreos Portugueses SGPS, SA (TAP SGPS or TAP Group), which combines the strength of the Portuguese government with Atlantic Gateway's extensive experience in aviation, also contributed positively to the rating.

The rating obtained confirms the successful implementation of the strategic plan defined by the shareholders and validates the growth strategy being implemented by TAP.

• TAP has been rated BB- with a stable outlook by the financial rating agency Standard & Poor’s, and a second rating by another international credit entity is pending.
• TAP's average debt maturity doubled in 4 years from less than 24 months at privatization in 2015 to approximately 4 years at the end of the third quarter of 2019. TAP intends to extend this term further.
• By 2019, TAP has already retired more than 170 million euros of financial liabilities. TAP’s indebtedness, as measured by the net debt / EBITDAR ratio, has declined by more than 40 percent since 2015.
• Number of passengers carried rose 11.1 percent in the third quarter from 8.9 percent in the second quarter and 0 percent in the first quarter of 2019, reinforcing the recovery trend.
• Access to credit for fuel price hedging minimizes volatility in TAP results. Hedges for more than 50 per cent of expected fuel consumption by 2020 is already contracted at a cost approximately 4 per cent lower than the average price in 2019, which equates to an estimated savings of € 30 million for 2020. TAP's fuel coverage conditions for next year are among the top three positions in Europe.
• TAP Group consolidated revenues for the third quarter of 2019 amounted to 1,052 million euros, an increase of 6.1 percent over the same period last year, supported by the growth of the North American market and the recovery of Brazil.
• TAP Group's consolidated operating income (EBIT) was 129 million euros in the third quarter of 2019, equivalent to 12.2 percent of revenues, in line with other European peers.
• Third-quarter EBIT increased 16.5 percent year-over-year, reflecting improved revenue growth and a 7 percent reduction in CASK (unit operating cost per seat kilometer), benefiting from entry into service new NEO and Airbus A321LR, as well as efficiency gains and cost reduction initiatives.
• TAP SA posted an accumulated loss of 111 million in the first nine months of the 2019, mainly due to exchange rate variations with no impact on cash. Excluding this exchange variation, TAP Group's consolidated net income for the third quarter of 2019 was 61 million euros, positively offsetting by 50 percent the loss generated in the first half of 2019.
• At September 30, 2019, TAP Group's total consolidated cash and cash equivalents amounted to Euro 254 million, which compares positively with Euro 223 million at December 31, 2018.
• Customer Satisfaction (NPS) improved by 9.2 points due to investment in fleet renewal with state-of-the-art aircraft, improved punctuality, continuous improvement in on-board service and, above all, by the quality of service provided by workers.
• The Company will hire more than 800 new employees next year, of which more than 100 are pilots and about 600 will be flight attendants in response to TAP's growth. Since privatization, Grupo TAP has hired more than 3,000 employees in Portugal.