March 9, 2020 / 6:31 PM / a month ago

UPDATE 1-Portugal's TAP grounds 2,500 more flights through May due to coronavirus

(Adds details, company comments)

LISBON, March 9 (Reuters) - Portugal’s flag carrier TAP on Monday suspended 2,500 flights scheduled for March-May, after cancelling 1,000 flights for this month and next on Thursday, citing a fall in demand for travel due to the coronavirus outbreak.

The 3,500 groundings account for 7% of TAP’s scheduled flights this month, 11% in April and 19% in May.

TAP said on Thursday it expected its revenues to be impacted by the coronavirus crisis and it was suspending non-critical investment and evaluating cost cuts.

It said on Monday it would contact all affected passengers to “find the best options and alternatives”, adding it was waiving ticket alteration fees for flights booked between March 8 and 31.

Industry experts say the coronavirus will likely accelerate a shakeout in Europe’s overcrowded airline industry, ultimately benefiting a few big players such as Ryanair and British Airways owner IAG, while smaller companies such as Norwegian Air, SAS, Alitalia and TAP may struggle.

Asked to comment about potential cash difficulties due to the virus epidemic, TAP told Reuters it was “successfully implementing its post-privatisation transformation plan” and had a “solid shareholder base”. TAP was partially privatised in 2015. The state still holds a 50% stake.

TAP also said it ended last year with its best cash position ever, despite posting a net loss of 106 million euros, and had also reduced operating costs and slashed this year’s debt repayments by 70% after recent renegotiation and extension of debt maturities.

Reports in the German media last month said Lufthansa and United Airlines were considering taking over TAP.

Portugal has so far reported 35 cases of the coronavirus, far below around 1,000 cases in neighboring Spain. (Reporting by Andrei Khalip; Editing by Mark Potter)

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