TAP Air Portugal’s Fired CEO Is Still Running The Airline

The CEO of one of Europe’s largest airlines continues to run the company a month after she was dramatically fired on national television. French executive Christine Ourmières-Widenerwith appeared before a parliamentary inquest on Tuesday to make her case and implore the Government for additional oversight.

Last month, Ourmières-Widener and TAP Air Portugal’s Chairman of the Board, Manuel Beja, were dismissed during a televised press conference over reports that a severance package to a departing board member was deemed illegal. The two were fired with “just cause,” meaning neither will receive compensation for their early contract terminations.

The former CEO has hired Lisbon-based law firm Vasconcelos Arruda & Associados to contest her dismissal, arguing that the requisite government ministers duly authorized the payment in question and that TAP’s General Assembly should have made the dismissal.

A productive, if embattled, tenure

Ourmieres-Widener, formerly the CEO of Flybe, was hired in 2021 to oversee the restructuring of TAP following a bailout of €2 billion in government aid to weather the coronavirus pandemic.

The first female CEO in TAP’s 78-year history, she led the company to record its first profit in 2022 despite fuel costs more than tripling to €1 billion (US$1.08 billion) in 2022. During the first full year of the restructuring plan, TAP generated an operating profit of $70 million, an all-time record for the company.

The scandal, which broke at the end of last year, forced the resignation of multiple government officials and left the airline without any updated government oversight. On Tuesday, Ourmieres-Widener told lawyers that it has been difficult to lead a company under so much political and media pressure with neither guidance nor a proper dismissal:

“After one month, I’m still in functions without any guidelines in a period for the company that is critical. This process that was started on TV is illegal and was really not appropriate and lacking all respect for a senior executive.”

As TAP’s majority owner, the Portuguese Government will decide on the CEO’s fate. Prime Minister Antonio Costa previously announced that Luis Rodrigues, a former CEO of Portuguese regional airline SATA (now Azores Airlines), would take over as chairman and CEO.

However, no further update has been issued, and Ourmieres-Widener remains responsible for running the organization in the interim.

How did the airline end up here?

The dispute revolves around one Alexandra Reio, who joined TAP’s Board of Directors in 2017. She was instrumental in the airline’s restructuring, which led to the cutting of more than 3,000 jobs. At the hearing this week, Ourmieres-Widener said that Alexandra Reis had not been “not up to the job” and that she was “not in line with” the administration’s restructuring policy.” When Reis left her role the following, she had two years left on her contract and was compensated with a severance payment of €500 million ($540 million). Reis had initially asked for a severance payment of €1.5 million, but she eventually received just a third of the total, which she is now obliged to repay.

At Tuesday’s hearing, the TAP executive shared that she had received a message from Hugo Mendes (Secretary of State for Infrastructures) on February 2nd “informing me that Pedro Nuno Santos (former Minister for Housing, Transport, and Infrastructures) had authorized” the Golden Handshake for Alexandra Reis asking her to “sign off on the agreement.”

Christine Ourmières-Widener said that she had not taken “any relevant decision” in the process of the Reis’ departure from the airline and acted simply as an intermediary between the Goverment and the airline company’s lawyers.

Photo: SvedOliver/Shutterstock

The Portuguese Government announced it plans to open the privatization process of the airline soon. Top candidates for a takeover of the airline include fellow Star Alliance carrier Lufthansa and the Air France-KLM consortium.

Source: Bloomberg