Labor groups win concessions in privatization of Portuguese national airline

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LISBON, Portugal — The successful bidder in the upcoming privatization of Portugal's national airline won't be able to make mass layoffs for at least two-and-a-half years after taking control, the Portuguese government said Thursday.

The government, announcing the terms and selection criteria of the planned sale, said it negotiated that and other conditions with most of TAP Air Portugal's labor groups.

The trade unions were nervous about the sell-off, and five walkouts last year disrupted the flag carrier's flights and hurt profits. Some analysts say the company's 7,500-strong payroll is bloated after seven decades of government management.

Other privatized European airlines, including Air France-KLM and Lufthansa, have seen disruption due to strikes over the past 12 months.

Additional criteria in selecting the best bid for TAP include the price offered, planned investment in the company, and airline experience, the government said. Also, the buyer will have to keep TAP's operational base in Lisbon.

The government has not said how much it hopes to earn from the sale by July of a 66 percent stake in the airline, with 5 percent of that going to staff.

TAP is one of 27 airlines in the Star Alliance network. It flies to 198 destinations, including 104 in Europe and 65 in North and South America. It carried 10.7 million passengers in 2013, the latest full-year figure available, and returned a profit of 34 million euros ($42 million), with debts of 842 million euros. It requires an influx of cash to modernize its fleet.

In 2012, the government postponed TAP's privatization after the sole bidder failed to provide required financial guarantees.

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