SATA closed 022 with record revenues at the Group's two carriers - Azores Airlines, with €211 million, and SATA Air Açores, with €92 million -, but the results were still insufficient to stem the Group's loss, which totaled €32.4 million at Azores Airlines and €2.5 million at SATA Air Açores. How can this negative net result be explained?´

SATA has been on a very important journey in terms of recovery.

We had an aid process and the approval of a restructuring plan with the European Commission and we are now going through this process. We also had a series of restructuring initiatives, both operational and financial, and we have been able to achieve very good results.

We have been able to achieve record revenues; referring, for example, to the first half of this year, although we are still calculating and closing results, the figures we have at Azores Airlines are 55% more revenue than in the first half of 2022.

In terms of costs, there was a process of restructuring costs and a process of renegotiating contracts in the leasing of aircraft and with other suppliers, while we had to define payment plans for old debts, both at Azores Airlines and at SATA Air Açores.

However, we have had a number of setbacks on this path, because in the meantime we went through a pandemic and as soon as it ended, a war came that brings inflation in prices, interest rate increases and increases in fuel prices, which greatly impact our results.

If we do not consider the effect of fuel prices, would SATA's results still be negative?

They would still be negative, but much less negative. We did this analysis for the first quarter of 2023 and, if we considered the fuel prices we had in the first quarter of 2019, we would have a considerable impact on EBITDA (Operating Income before Interest, Taxes, Depreciation and Amortization).

However, even though we still have a negative net result, we can see that, operationally, the company is more stable, more solid and having better results.

Because when we look at the results of an airline, we have to look at the full year, since airlines have a very large seasonality, with a weaker first quarter, a slightly better second quarter, a very good third quarter and a fourth quarter slightly better than the second....

In addition, SATA has a very significant weight in tourism in the Azores and has a great potential to attract tourism to the region. Little by little, we have managed to break this seasonality.

For example, this year we had very strong revenues in the first quarter compared to other first quarters.

And in terms of costs, what has been the increase?

We have had exogenous factors that are beyond us and that continue to exist. Our costs have increased by about 50 per cent and we are not going to be able to reflect that increase in fares, or in the price to the passenger.

We have to realize that airlines are in a very delicate position.

Is the horizon set by the previous board of directors still possible to achieve?

The plan approved by the European Commission was to make Azores Airlines sustainable by 2025.

We were the ones who raised the possibility that this could happen by the end of 2023, beginning of 2024.

Obviously, we had a series of constraints and exogenous factors that changed this forecast, but I can assure you that if we compare the results that SATA has today with the prices and interest rates foreseen in the restructuring plan, SATA would achieve better results than those that were actually defined in the plan.

For example, we expect to achieve revenues at Azores Airlines of EUR 260 million in 2023, which is the revenue figure that is in the restructuring plan for 2025.... So we are anticipating the revenue by two years.

How is SATA dealing with its liabilities at the moment?
In order to look at SATA's liabilities, it is important to take into account this whole process that SATA has been going through. SATA is undergoing a restructuring process and this process implies a reorganization of its human resources, with the inherent burdens.
It involves renegotiating payments to suppliers and renegotiating payment plans for old debts. It also involves restructuring SATA's bank debt and carrying out the corporate reorganization process, since we have already created a holding company.
Who will be responsible for the liabilities if the privatization of Azores Airlines is successful? The new majority shareholder or the Regional Government?
The privatization will go through a negotiation process, so at this point it is not yet possible to say who will get what.

But this is an important question...
... It is a fundamental question, which will arise during the process and which I cannot answer now. However, it is important for Azoreans to know that since January 2023 the Regional Government has not put a single euro in SATA.
And did that situation interfere in the management of SATA?
The Regional Government does not interfere in the management of SATA.
What is the situation of Azores Airlines’ privatization process?
The privatization process started on 23 March and we had a number of entities - more than 30 - that registered on the platform to be able to consult the tender specifications.

What can make Azores Airlines attractive to new investors at this moment?
I think Azores Airlines has an outstanding potential: it is located in the middle of the Atlantic, in a very strategic position. We are four hours from North America and we connect to Europe very quickly.
Azores Airlines very consolidated routes, we have done a lot of work in North America and these routes have been very successful. We connect the Diaspora and now we are starting to be able to grow in terms of tourism on those routes. We are very consolidated in North America.
Therefore, Azores Airlines has a very important position and a lot of market potential to explore, if there is an investor who really wants to invest and make the company grow.

Is it possible to reveal anything about those interested in Azores Airlines?
This process is quite confidential, but I can say that there are several entities actively consulting the process, that is, asking questions.

What is your vision for the future of SATA?
SATA must grow. In the future, there will also be a fleet change challenge. Above all, I want SATA to continue to be the airline of Azoreans, because in fact SATA is very important for the transport of people and goods.
And that our workers feel satisfied doing their job. For me, as chair of SATA, it is essential that people feel good about their work and that they are part of the process of transforming the company.
SATA employs 1,600 people and we must not forget that these people are very valuable, because in terrible times they managed to turn the company around and to get SATA back on its feet.