TACV To Cut Jobs, Debt In Restructuring Plan
TACV Cabo Verde Airlines, Cape Verde's loss-making national airline, plans to cut nearly a quarter of its staff and review routes as part of a restructuring plan to reduce debt and attract foreign investors.
TACV has been running at a loss for years, relying on government loans as it struggles to keep costs down and ticket sales up, despite being a key mode of transport in one of Africa's fastest growing tourist destinations.
Last month a plane operated by TACV was grounded in the Netherlands after AerCap, an aircraft leasing company, issued a "ground notice" in relation to a debt repayment. The reason for the grounding was not clear and AerCap was not available for comment.
"We have some potential… with our strategic location to attract investors if we restructure the company and bring costs to appropriate levels," TACV chief executive Joao Pereira Silva said in an interview.
"It is clear that we have to reduce the amount of staff to make the company more profitable."
The restructuring, which began in October and is expected to be completed by December, will involve cutting up to 120 of its 510 staff members, Silva said. The airline will also reduce unsustainably high debt levels as it seeks to bring in outside investment and reduce government intervention. He declined to say how much TACV owed to its creditors.
TACV planes are the main link between Cape Verde's picturesque islands, located nearly 700 km off Africa's west coast, with eight routes among them.
The airline also has 10 international routes used by tourists and Cape Verdeans who live in the United States, Brazil, Africa and Europe. It is believed that more Cape Verdeans live outside the country than in it.
Silva said the airline will complete a review of its routes but that he did not expect any to be cancelled.