Deputies from Chega and BE in the Azorean parliament demanded accountability from the Regional Government on Tuesday. They raised concerns over what they described as the ruinous conditions of a bank loan taken out by SATA.
SATA Airline Loan Mismanagement: Details of the Loan
This loan, amounting to 60 million euros, was secured in 2022. The deputies emphasized that the terms of the loan were detrimental and called for a thorough examination of the situation.
This is a disastrous act of management, said Francisco Lima, a deputy for Chega, in an interview with the media. He expressed concerns about the bank loan taken out by SATA.
Concerns Raised by Francisco Lima
Lima pointed out that the Regional Government executed the operation in 2022 and repaid the money in 2023. He questioned the usefulness of this loan, stating, It is nothing more than financial engineering that we do not understand.
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His comments followed the receipt of confidential information from the executive (PSD/CDS-PP/PPM) and the airline regarding the loan.
Clarification From The Government
In a previous parliamentary hearing, the Regional Government clarified that it took out the loan from the financial institution JP Morgan for a five-year term solely to demonstrate to the European Commission that SATA had the financial capacity to incur debt.
This was necessary during SATA’s restructuring process and the Regional Government carried it out without interference from its shareholder. Furthermore, Francisco Lima said:
We have doubts regarding the legality and legitimacy of SATA in taking this decision and Chega has decided that it will send a request to the Court of Auditors for an opinion on the legality of these acts carried out.
Financial Implications
According to the Chega MP, there is no justification for the Azorean airline, which is currently facing serious financial difficulties, to have turned to the bank under such disadvantageous conditions.
The airline received only 24 million euros of the 60 million euros agreed upon with the financial institution, while JP Morgan retained 36 million euros. Additionally, the airline has paid approximately six million euros in interest.
Perspective Of Bloco de Esquerda
The BE MP António Lima corroborated:
SATA basically spent money and handed over six million euros to a large European bank , in a situation where it had no need whatsoever. A completely ruinous deal , which should not have been done this way.
The SATA Group reported a loss of approximately 45 million euros in the first six months of this year, despite an increase in both passengers transported and revenue generated. Specifically, Azores Air Lines (formerly SATA Internacional) recorded a loss of 38 million euros during the same period.
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Moreover, the Bloco de Esquerda parliamentarian made a joke about the company’s current financial situation and the unfavorable conditions of the loan. He said:
A company that is in difficulties, and in the process of supposed recovery, cannot put itself in a situation where the cure, so to speak, is worse than the disease.
Future Plans for SATA
Therefore, he added, it is crucial for the Bloco de Esquerda (BE) that the Regional Government, led by the social democrat José Manuel Bolieiro, explains its plans for the Azorean airline.
This is especially important in light of the financial disaster and to clarify whether SATA’s operations will undergo changes due to these difficulties.
In addition to financial responsibilities, Chega and BE also intend to investigate political responsibilities for this case of mismanagement at SATA.
