The financial rating agency DBRS Morning Star warns that the Regional Government must complete the privatization process of Azores Airlines (SATA Internacional) by the end of 2025.
“The divestment of SATA must be resumed and completed before the end of 2025 in order to comply with the current restructuring plan signed with the European Commission,” says a statement from the Canadian rating agency, which also warns of the risk of budget slippage. According to DBRS Morning Star, spending and the deficit are increasing.
DBRS analyzed the post-election scenario in the Azores, which went to the polls last Sunday, with the PSD/CDS-PP/PPM coalition winning but with a relative majority. ”The new government will face spending pressure on the regional budget and pressure to complete the privatization of SATA,” argues DBRS. The privatization process was interrupted following the rejection of the regional budget proposal for 2024 and the calling of early elections.
In the agency’s view, with “the growth in air activity, as a result of the dynamics of tourism, the public company has improved its operational performance, which will help maintain the interest of the two buyers.”
“Morningstar DBRS will continue to monitor the implementation of the restructuring plan in the future and assess any potential negative financial impact on the region’s credit profile resulting from SATA,” the agency said in its statement.
On another level, the agency states that “any new government will have to approve a multi-year financial plan and financial targets with the central government, which should help ensure a fiscal consolidation policy to reduce deficits.”
DBRS believes that “the new government will continue with the policy of fiscal consolidation towards a balanced budget.”
This analysis has political overtones, with the scrutiny in the Azores presented with consequences in the archipelago and at the national level.

“These negotiations and Chega’s potential entry into the regional government could play a role in the national elections and will probably be commented on in discussions during the political campaign,” says the agency.
At the beginning of December, the Regional Government announced its decision to suspend the privatization of Azores Airlines.
At the time, the President of the Regional Government, José Manuel Bolieiro, said that the “ethical understanding” was to suspend the “sale tenders, for privatization purposes, of part of the Regional Public Business Sector.”
The matter has been controversial, with the SPAC-Civil Aviation Pilots’ Union, accompanied by SITAVA and SNPVAC, advocating, at the end of November, the “immediate cancellation” of the tender for the sale of Azores Airlines’ share capital.
“The two consortia that took part in the tender have a business profile that is far from what would be most desirable,” the unions believe.
The Atlantic Consortium entered the race, which includes the Portuguese airline’s Euro AtlanticAirways and WhiteAirways (part of the OmniAviation group) and the companies VesuviusWings, OldNorth Ventures (a consultancy based in the Azores), and Consolidator (a Portuguese platform for issuing airline tickets). The other consortium brings together Newtour, led by businessman Tiago Raiano, a native of the Azores, and MS Aviation, an Austrian private aircraft management company that Newtour and the Angolan company Bestfly bought.
DI (Diário Insular Newspaper) questioned the SATA group on this issue yesterday but could not obtain a position by the close of this edition.

in Diário Insular, José Lourenço-director

Translated to English as a community outreach program from the Portuguese Beyond Borders Institute (PBBI) and the Modern and Classical Languages and Cultures Department (MCLL) as part of Bruma Publication and ADMA (Azores-Diaspora Media Alliance)  at California State University, Fresno–PBBI thanks the sponsorship of the Luso-American Development Foundation from Lisbon, Portugal (FLAD)