A response from the Regional Government to a request from Chega/Azores reveals 10 loss-making routes operated by Azores Airlines (SATA Internacional) in 2024, which contributed “to the company’s negative results.”

Last year, the SATA group reported an accumulated loss of €82.8 million, more than double the €36 million recorded in 2023.

According to the executive’s response, SATA’s current board of directors, which took office in July last year, opted to maintain the routes, taking into account the “losses resulting from compensation and reputational damage that would be greater than those currently recorded.”

Also, according to the Regional Government, “in order to ensure that the deficit results of the routes (…) do not negatively impact the results for 2025, SATA’s board of directors has already canceled them.”

The list of routes includes those created between the United States of America and Canada via Madeira (Funchal/Boston/Funchal; Funchal/Toronto/Funchal; Funchal/New York/Funchal), but also between Porto and the US and Canada (Porto/Boston/Porto; Porto/Toronto/Porto; Porto/New York/Porto), as well as the Ponta Delgada/London/Ponta Delgada route.

There are also connections between Terceira and New York, as well as between Terceira and Boston, which had negative results during the winter, similar to the Ponta Delgada/Milan/Ponta Delgada route.

“The routes that performed best financially were those from Ponta Delgada and Terceira to Lisbon and Porto, as well as the routes from Ponta Delgada to Boston, Toronto, Montreal, Bilbao, and Frankfurt,” Chega said in a statement.

The party argues that the SATA group chose to maintain loss-making routes to save its image. “There are decisions that should have been taken long ago, such as ending loss-making routes. In a private company, when objectives are not achieved, the path taken is rethought and many companies close because they are not viable. At SATA, there should be no fear of moving forward with a similar solution for the sake of the economic development of the Azores,” said Chega’s parliamentary leader in the Regional Legislative Assembly, José Pacheco.

At Azores Airlines, the contracting of ACMIs exclusively for new routes (loss of €9 million), the revision of agreements with pilots and flight attendants (€10 million), the lawsuit against Hifly regarding the “Cachalote” (€6.4 million), increased maintenance costs, particularly for engines (€5 million), and compensation related to irregularities in 2023 (€3.2 million) were responsible for the significant impact on EBITDA,” Chega said.

Concerning SATA Air Açores, the revision of company agreements (€3.6 million), correction of methodologies for calculating the company’s future liabilities in the Pension Plan (€1.4 million), and increased maintenance costs, particularly for engines (€4.9 million), were the main factors responsible for the negative results.

Meanwhile, the Angra do Heroísmo Chamber of Commerce and Industry (CCIAH) argues that the regional secretary for Tourism, Mobility, and Infrastructure, Berta Cabral, should provide “additional clarification on the profitability of the air routes operated from Terceira Island, with a special focus on connections to the United States of America.”

The body representing business owners believes that certain aspects require clarification. “The official response indicates that the Terceira-New York-Terceira and Terceira-Boston-Terceira routes showed negative results during the winter, which raises an essential question: do these routes not perform well during the summer?” it asks.

In a statement sent to newsrooms, the CCIAH requests the disclosure of the occupancy rate recorded in winter for all routes operated by Azores Airlines.

“In the CCIAH’s view, however, it is important to emphasize that no hasty conclusions should be drawn based solely on the low season, since the assessment of the profitability of an air route must take into account its performance throughout the year,” it stresses.

The CCIAH also considers that “this official disclosure confirms the fairness of its request, made in October 2024 to the Regional Legislative Assembly, for the creation of a commission of inquiry into the loss-making routes of Azores Airlines.”

The chamber of commerce, which advocates the “immediate privatization of Azores Airlines,” stresses that the “data now made public prove that Terceira Island is not responsible for the financial collapse of Azores Airlines, contrary to unfounded insinuations that sometimes emerge in public debate.”

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 Literatures Department (MCLL) as part of Bruma Publication and ADMA (Azores-Diaspora Media Alliance) at California State University, Fresno, PBBI thanks Luso Financial for sponsoring NOVIDADES.