Could be due to the growing call from public for abandoning the process, but, the Government of the Azores has cancelled the privatisation tender for Azores Airlines and will launch a new one, claiming that the company was valued at six million euros at the beginning of the process and is worth now 20 million.
The Vice President of the Regional Government of the Azores (PSD/CDS-PP/PPM), Artur Lima announced,
"The Council has decided not to proceed with the privatization process of Azores Airlines due to the significant change in economic and financial conditions taken into account in the initial assessment of the company. The current privatization process of Azores Airlines is therefore cancelled."
The regional Executive understands that it is better for the Azores to step back and begin a new privatization process.
The only member in the race condemns the regional government's decision. In a statement, Newtour/MS Aviation states that the justification presented by the Government "has no basis" .
The governor spoke in Angra do Heroísmo, on the island of Terceira, and read out the statement of the Council of Government, which meets today via video conference.
At the beginning of April, the jury of the public tender for the privatization of Azores Airlines released its final report and maintained the decision to accept only one competitor, but admitted to having doubts about the ability of the Newtour/MS Aviation consortium to maintain the viability of the guarantee society.
The SATA Group Board of Directors, led by Teresa Gonçalves, who has since resigned, expressed "its reservations about the NewTour MS Aviation consortium and the competitor's limitations" in the opinion sent to the regional government.
At the beginning of April, the jury for the public tender for the privatization of Azores Airlines delivered the final report and maintained the decision to accept only one competitor, but admitted reservations regarding the ability of the Newtour/MS Aviation consortium to ensure the company's viability.
According to Artur Lima, the decision to cancel the competition was taken on the basis of an evaluation of the SATA Group airline, carried out by a consultant, which now estimates it to be worth "more than 20 million euros", while it is the beginning of the process was estimated at six million.
"The best interest of the Autonomous Region of Azores in a company that is now more valuable, that is more robust, is to cancel this privatization process and start a new privatization process, with this new value of 20 million euros, instead of six million euros ", he said.
The board of directors of the SATA group, led by Teresa Gonçalves, who has since resigned, expressed “reservations about the NewTour MS Aviation consortium and the limitations of the competitor” in the opinion sent to the Regional Government.
When asked whether reservations about the competing consortium also played a role in the decision, the vice-chairman of the regional government responded, saying,
"The argument that the government uses to cancel this privatization process is to defend the public interest of the Autonomous Region of Azores and Azores Airlines [...]. This is the argument that the government uses to cancel it, all other arguments discussed were not relevant,” he emphasized.
Artur Lima recalled that the region has until 2025 to complete the privatization process of Azores Airlines, as agreed with the European Commission.
“We have the time to start a new round of privatization and since we have the time and a more valuable company, we can start a better privatization round, which better defends the Azores and serves the interests of the Azores,” he revealed.
"We will soon start the new privatization process of Azores Airlines, I cannot say exactly when, but we still have some time for it," he added, emphasizing that "the only way to save the company is of course to to privatize for a capital injection".
Carlos Silva, a member of the Azorean PS secretariat,said,
“The Regional Government’s announcement that it will cancel the privatization process and launch a new procedure [for the privatization of Azores Airlines] turns out to be good news for the Azores and the Azoreans, because it is also the Government’s recognition [that] it has failed in the process it has designed and implemented so far.”
The government official also rejected that the launch of a new competition is a "setback" in the process, claiming that the executive branch would be "doing harm if it does not benefit from this added value".
The Civil Aviation Pilots Union says it is satisfied with the cancellation of the competition . He guarantees that he was aware of several problems during the process and considers that the only competitor would jeopardize air transport in the Azores.
The PS/Açores submitted a request to the regional parliament requesting information from the executive (PSD/CDS-PP/PPM) about the Azores Airlines evaluation report, following the decision to cancel the airline's privatization tender.
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