Consumer advocate agency (for profit) Flightright has initiated steps to seize all of TAP Air Portugal’s accounts in Germany as the carrier failed to pay judgments and attorneys fees of roughly 1 Mio EUR.
The misery of trying to get TAP to pay up stretches over years and I had my own run in with them when claiming EU compensation for two friends who misconnected on TAP. Back then the airline did pay up after involving the Ombudsman in Germany.
Now Flightright – a German company that helps people recover due compensation from airlines for a cut – has accumulated liabilities owed to them by TAP of roughly 1 Million Euro, obtained through lawsuits and subsequent judgments.
TAP has simply refused to pay these judgments and the company had enough. According to a press release they have now initiated proceedings to seize all accounts and deposits in Germany:
According to the press release the situation is as follows:
Flightright has obtained a court order and instructed the court appointed collector to seize bank and securities accounts as well as safety deposit boxes in German after the TAP Air Portugal has failed to pay the company 750,000 Euro in judgments resulting from ~900 cases in 2019 plus 250,000 Euro in court and attorneys fees. Until the airline has paid these 1 Mio Euro to the company all access to the accounts is blocked.
Flightright accuses TAP of blatantly ignoring the claims and judgments as well as having a track record of simply not paying the compensation as they’re obliged to do. The company calls TAP’s conduct completely unacceptable and decided to use all legal means at their disposal to make the company pay up. Seizing the accounts usually leads to payment of the outstanding debt as the company is unable to pay for any local expenses such as salaries, maintenance and other costs to run their business. [Of course they could facilitate these payments at least in part from Portugal.]
Flightright says they expect that the airline is able to pay the 1 Million Euro as the carrier is partly owned by the Portuguese state.
The company has seized assets of airlines in the past. In 2018 Onur Air was on the receiving end and in 2017 they came short of seizing an aircraft of Bulgaria Air which paid the debt in the last minute before the plane was to be impounded.
With the Covid-19 crisis going on, having one of their planes impounded is probably not as much of a deterrent for TAP and also a very costly exercise as it needs to be parked etc which all costs money. Trying to sell the plane would also be hard but I guess there’d be plenty of takers if it’s cheap enough.
Ultimately TAP Air Portugal has to find a strategy for the future. They can’t keep ignoring court orders and judgments to escape their financial liabilities. Depending on their real financial situation the owners and management eventually have to decide if a bankruptcy filing is the suitable solution here. This wouldn’t wipe away liabilities from previous judgments against the airline though.
TAP’s conduct over the years has been really disgraceful. Every month we get hundreds of emails and messages with compensation questions and complaints about airlines. TAP has been omnipresent in this correspondence ever since and the most effective way so far was to involve the government ombudsman.