The management of SATA confirmed on Wednesday that it is “reviewing” the jury’s recommendation to reject the proposal submitted for the privatization of Azores Airlines and said it will forward the matter to the Azores Regional Government.

The statement follows the announcement by the jury overseeing the privatization process, which recommended rejecting the bid presented by the Newtour/MS Aviation consortium.

According to the jury, the proposal fails to meet the requirements established in the tender process, does not comply with previously defined conditions and obligations, and does not adequately safeguard the financial interests of SATA Holding and, by extension, the Autonomous Region of the Azores. The jury concluded that the proposal would place the region in a significantly worse position than the one resulting from the same consortium’s bid submitted in 2023.

Under the proposal now recommended for rejection, SATA Holding would be required to fully capitalize Azores Airlines. The proposed payment terms provide no mechanism or legal instrument allowing SATA Holding to recover the amounts invested, effectively forcing it to assume unlimited—or at least insufficiently quantifiable—financial liability.

The jury also noted that several of the consortium’s proposed contractual changes do not reflect standard market practices, even for assets facing particularly challenging financial conditions. In addition, the consortium did not accept amendments proposed by SATA Holding and, in practice, does not foresee any direct financial injection into the airline. As a result, the economic risk of the operation would remain almost entirely with SATA.

The jury further warned that accepting the proposed terms could expose the transaction to the risk of being classified as unlawful state aid, with potential legal consequences, due to possible noncompliance with the “market economy operator” principle.

Before the final report is approved, and in accordance with applicable administrative and contractual law, the consortium retains the legally defined right to respond to the jury’s preliminary decision and its underlying reasoning.

Following the jury’s recommendation, SATA Holding’s Board of Directors confirmed it is analyzing the proposed rejection of the Newtour/MS Aviation bid. In a statement, the company stressed that “the privatization of Azores Airlines must comply both with European Union rules and with the requirements established in the public tender,” adding that these criteria will form the basis of the board’s final decision.

The board reiterated its commitment to finding “the best possible solution” for Azores Airlines while defending the interests of the company, its employees, and the Azorean region and its communities.

SATA added that it will now forward the process to the Azores Regional Government, requesting guidance on the next steps. “SATA Holding is prepared to assess and act responsibly across different possible scenarios,” the statement concluded, “always ensuring compliance with legal obligations and prioritizing the best interests of the company and the region.”

PSD/Açores Calls for Hearings

The parliamentary group of PSD/Açores has requested hearings before the Economy Committee of the Azores Legislative Assembly with the Regional Secretary for Finance and the chairman of SATA Holding’s Board of Directors to clarify the privatization process of SATA Internacional–Azores Airlines.

Following the jury’s announcement that it intends to recommend rejecting the bid submitted by the Atlantic Connect Group consortium, Social Democratic lawmakers said it is “essential” that both the Regional Government and SATA’s management provide full transparency regarding the development of the process.

The request stipulates that the hearings take place after SATA Holding’s Board of Directors issues its final decision on the jury’s report, ensuring lawmakers have access to “all relevant information,” including both the preliminary and final jury reports and the reasoning behind the board’s decision.

PSD/Açores lawmakers also requested a separate hearing with the chairman of SATA Holding’s board regarding the airline group’s restructuring process and the creation of SATA Handling.

PS/Açores: ‘A Government Failure’

Socialist Party official Carlos Silva said on Tuesday that the jury’s position confirms, point by point, the concerns raised by the Socialist Party since the beginning of the privatization process in 2023.

According to Silva, the outcome is inseparable from the failure of SATA’s restructuring plan, for which he assigns direct political responsibility to the President of the Regional Government, José Manuel Bolieiro, the Regional Secretary for Transport, Berta Cabral, and the Regional Secretary for Finance, Duarte Freitas.

“For five years they concealed the company’s true situation, conducted an unstable process, and consistently refused to assume political responsibility for the disastrous results inflicted on the SATA Group,” Silva said.

He recalled that PS/Açores had repeatedly warned that the process “did not serve Azoreans,” citing the lack of legal certainty, failure to protect regional interests, insufficient safeguards for jobs, and the absence of guarantees for strategic air routes connecting the Azores to mainland Portugal and the diaspora.

Silva emphasized that the jury’s explicit reference to the risk of the transaction being classified as state aid “directly contradicts the position consistently taken by the Regional Government.” He noted that the government had repeatedly denied such risk and claimed to possess legal opinions dismissing it—claims now undermined by the jury’s assessment.

“What the jury has now identified was previously flagged by the Socialist Party and many others,” Silva said, citing the absence of legal certainty, the omission of debt forgiveness from the tender documents, amateur and opaque management of the process, and the failure to safeguard regional mobility, public finances, or employment.

According to Silva, the Regional Government dragged out the privatization process for more than two years despite being aware of its structural weaknesses, resulting in lost time, lost resources, and accumulated losses of approximately €150 million over that period alone.

“For PS/Açores, this outcome shows that the drive to privatize at any cost replaced the defense of the public interest,” Silva concluded. “What failed was not just a tender, but an entire political strategy for SATA—and Azoreans are the ones paying the price.”

The Socialist Party argues that the process must now be reassessed with rigor, transparency, and responsibility, placing the protection of workers, air connectivity, and public resources at the center.

Chega-Açores Proposes Two Options

Chega-Açores, for its part, suggested either shutting down Azores Airlines/SATA Internacional or integrating the carrier into TAP, arguing that “continuing as is is not an option.”

In a statement, the party said that maintaining the airline in its current state is “simply irresponsible” and criticized continued demands for public sacrifice to sustain a company that “has shown no capacity to be viable.”

Chega-Açores outlined what it called “two clear and honest paths”: first, closing Azores Airlines and openly acknowledging that the project has failed; or alternatively, integrating the airline into TAP—an option the party says should be examined “without ideological prejudice.”

According to Chega-Açores, integration into TAP could help avoid costly severance payments, preserve jobs, and ensure essential air connections for the Azores.

In Diário dos Açores, Paulo Viveiros-director

Translated into English as a community outreach program by the Portuguese Beyond Borders Institute (PBBI) and the Modern and Classical Languages and Literatures Department (MCLL), in collaboration with Bruma Publication and ADMA (Azores-Diaspora Media Alliance) at California State University, Fresno. PBBI thanks Luso Financial for sponsoring NOVIDADES.