TACV Cabo Verde Airlines, the national carrier of Cape Verde, has obtained the approval of the Government of the Republic of Cape Verde for a state guarantee amounting to 5.8 million dollars. The endorsement aims to support TACV in its investment program, specifically for the acquisition of a second aircraft, a Boeing 737 MAX 8 aircraft. This endorsement marks another significant step in the airline’s efforts to expand its fleet and strengthen its operations.
TACV’s government-backed loan
According to a government resolution accessed by the Portuguese news agency ‘Lusa’ published on June 15, TACV secured a bank loan from Banco Cabo-Verdiano de Business (BCN) worth 650 million Cape Verde Escudos (approximately 5.8 million dollars). This loan will facilitate the acquisition of the Boeing 737 MAX 8, which will join the airline’s fleet. The government recognizes the crucial role that TACV plays in the national economy and views this operation as essential for the development of the company’s activities and the realization of its financial stabilization plan.
In order to proceed with this transaction, the BCN required the state’s guarantee as a condition for financing. The duration of the operation is set at nine months. The government acknowledged the necessity for additional financial resources to address TACV’s undercapitalization and financial restructuring, highlighting the significant role the airline plays in the national economy.
The government has been actively supporting TACV, its majority shareholder, by providing financial contributions to ensure the airline’s viability and honor its commitments. In December last year, a state guarantee of 250 million escudos (2.2 million dollars) was approved to support the company’s operations and activities planned for 2022. Additionally, in February 2022, the government granted a guarantee for a loan of 1.5 million dollars to address emergency needs such as salary payments.
As part of the strategy to stabilize and revitalize TACV before re-privatization, the Cape Verdean government plans to inject 1 billion escudos (9.1 million dollars) annually into the airline over the next three years. This financial support aims to ensure the airline’s stability and facilitate its recovery.
TACV, previously owned by Lofleidir Cabo Verde, a company predominantly held by the Loftleidir Icelandic EHF (Icelandair group), experienced a change in ownership due to non-compliance issues during the pandemic. The Cape Verdean state assumed a 51% stake in TACV in July 2021, dissolving the previous management structure.
Since resuming operations in December 2021, TACV has been operating flights between Praia, Lisbon, Sal, and São Vicente. The airline currently has a single aircraft at its service – a 16-year-old Boeing 737 700, from TAAG Angola Airlines. With the arrival of MAX to be christened “Morabeza” the Cabo Veridian carrier hopes to resume routes that previously operated like Paris this year, Recife and Boston, among others.