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Portugal's new government, private owners engage in tug-of-war over flag carrier

Associated Press
Published | Updated

LISBON, Portugal – A battle is brewing between Portugal's new government and the consortium that won the privatization of the country's national airline.

The government wants the flag carrier back under state control.

Prime Minister Antonio Costa said Friday his Socialist government will retake a majority stake in TAP Air Portugal, even if the Gateway consortium refuses to negotiate a compromise. He didn't elaborate.

Gateway last month paid 354 million euros ($384 million) for 61 percent of the airline and has since injected capital and ordered new aircraft.

Gateway's David Neeleman, founder of the JetBlue airline in the United States and CEO of Brazil's Azul carrier, said Thursday the consortium intended to honor the contract it signed.

Bringing the airline back into public ownership was a Socialist promise in the recent general election.