LISBON, March 6 (Reuters) – Portugal’s government has sacked the chief executive of the state-owned airline TAP in the wake of a scandal involving an irregular severance payment of 500,000 euros to a former executive board member, Finance Minister Fernando Medina said on Monday.
He told a news conference CEO Christine Ourmières-Widener, who is French, as well as chairman Manuel Beja, were dismissed with just cause after the general finance inspectorate established that the payment made to Alexandra Reis, a former government official, was illegal, meaning Reis must return the money.
Luis Rodrigues, current CEO of the Azores regional airline SATA, will take over as both chairman and CEO.
“This episode has shaken the confidence of the Portuguese in TAP and it is essential, above all, to recover the bond of trust between the country and the company,” said Medina, who himself has been the target of sharp criticism over the payment made by TAP, which received a taxpayer-funded bailout.
In December, Reis, who had just become the treasury secretary of state, had to quit and the scandal also forced Infrastructure Minister Pedro Nuno Santos to resign.
Medina said that “the path of stabilisation and privatisation of part of its (TAP) capital is not in question”.
“The government expects to open the process of privatisation of the company soon,” he said.
TAP was rescued last year to the tune of 3.2 billion euros under a plan approved by Brussels. It has reduced its fleet, eliminated thousands of jobs and cut wages in an attempt to return to profit in the next few years.