Azores Airlines to expand transatlantic operations with A321neo
Here’s another one of those stories that underscores what we’ve said before. States and governments, generally, should have no business in commercial aviation. This is the ongoing saga of Azores Airlines.
Background
Azores Airlines (formerly SATA Internacional) is the international arm of the SATA Group (Grupo SATA), a Portuguese airline owned by the Regional Government of the Azores. It handles routes from the Azores archipelago to mainland Portugal, Europe, and North America (including key diaspora connections to cities like Boston, New York, Toronto, and Oakland). The airline added A321s for these services. The domestic inter-island operator, SATA Air Açores, remains fully public and is not part of the privatization.
The privatization process stems from chronic financial losses dating back to at least 2014, worsened by the COVID-19 pandemic. The airline has required massive public bailouts, totaling hundreds of millions of euros in taxpayer funds.
Privatization Attempts
Previous privatization attempts (e.g., in 2018 and 2020) failed or were abandoned. The SATA Group has been state-owned since 1980, and ongoing losses have prompted EU scrutiny of state aid. The European Commission approved €453.25 million in restructuring aid (loans and guarantees) for the SATA Group. Still, it mandated privatization of at least 51% of Azores Airlines as a condition to avoid violating EU competition rules.
The Azores government announced plans to sell 51–85% via international public tender, starting in January 2023. A corporate restructuring split Azores Airlines into a separate subsidiary under a new holding company.
Tenders launched in March, with bids due by mid-year—two consortia bid, but only one advanced. The process was intended to be completed by late 2023, but dragged on. In May, the government canceled the tender, citing a new independent valuation of the airline at €20 million (up from €6 million initially), arguing it undervalued the company. Plans were made for a new tender. Losses continued, reaching €83 million across the group in 2024.
Instead of a completely new tender, the government resumed negotiations with the Newtour/MS Aviation consortium (led by Tiago Raiano, later joined by prominent Portuguese businessmen Carlos Tavares — ex-CEO of Stellantis — and Paulo Pereira da Silva). The consortium improved its offer to around €15–15.2 million for a majority stake (up to 76%). The regional government agreed to assume the airline’s massive debt (estimated at €400–600 million) to make the deal viable.
There have been multiple delays, extensions (most recently November 24, 2025, for a binding proposal), and tensions:
- Unions (especially pilots via SPAC) negotiated labor agreements; pilots approved a deal with the consortium by 75% in early November 2025.
- Accusations of opacity, blocked information sharing, and “illegalities” in rule changes (e.g., government absorbing debt mid-process).
- The government stated it will do “everything in its power” to save the airline, but warned that failure could lead to a shutdown by 2026 (no more state aid allowed under EU rules) or to direct negotiations/private sale. Public service obligations (e.g., maintaining routes) are required in any deal.
The saga has been controversial: critics call it a “bottomless pit” for taxpayers (over €800 million injected), while supporters see privatization as essential for sustainability and to end losses. As of now, a deal seems close but uncertain, with the consortium “fully committed” and positive signals from recent union approvals. If it fails, the airline’s future — and Azores’ direct international connectivity — could be at serious risk.
Only one bidder?
Given what we’ve mentioned, you might assume the government has only one bidder to deal with. Turns out there’s another bidder, and the government is ignoring them.
Oleg Evdokimov is a Russian aviation consultant and president of Melonaero, a firm specializing in restructuring distressed airlines, recovering idle aircraft, negotiating with lessors, and advising on airline privatizations (among other “unconventional” solutions). He has been involved in various global aviation turnaround projects, including attempts to revive grounded Superjets in Mexico, as well as partnerships in the Maldives (where he’s been pushing for the privatization of state-owned Maldivian for years), Egypt, and the Philippines.
In the context of Azores Airlines/SATA:
- As far back as 2019, he publicly expressed interest in participating in the SATA privatization process through one of his earlier ventures.
- More recently (in an August 2025 interview with Russian aviation media RuAviation), Evdokimov revealed that he is actively trying to convince the Azores regional government that privatizing Azores Airlines is premature. He argues that a rational transit hub model (leveraging the islands’ mid-Atlantic location for efficient connections) must first be established before any sale, and he criticizes the industry’s low overall management level as a barrier.
He is not part of the Newtour/MS Aviation bid and has no formal role in the ongoing direct negotiations. Instead, he positions himself as an external advisor/critic who believes the airline could be made viable (and more valuable) under a better strategic model before handing it to private investors — essentially lobbying against rushing the privatization in its current form.
His involvement appears to be unsolicited advisory from the sidelines, likely aimed at positioning Melonaero for future consulting/restructuring work if his views gain traction, or perhaps as part of a broader interest in distressed Atlantic island carriers (similar to his Maldives efforts). There is no public evidence that the Azores government has engaged him officially or altered the process based on his input.
Evdokimov issued this statement to us:
“OFFICIAL STATEMENT Issued on behalf of the international investment consortium expressing interest in acquiring Azores Airlines
Lisbon / Ponta Delgada, November 2025
We confirm that an international investment consortium, represented by Mr. Oleg Evdokimov, has formally expressed its intent to invest up to €500 million in the restructuring and development of Azores Airlines. The proposal includes:
- Financing for fleet renewal, route expansion, and operational modernization
- Preservation of the Azores Airlines brand and its operational base in the Azores
- A transparent ownership structure registered within the EU, compliant with all regulatory and control requirements
We express serious concern regarding the lack of transparency in the ongoing privatization process. Despite public declarations of openness and competition, our consortium has not been granted access to negotiations, while submission deadlines have been repeatedly extended in favor of a single participant, whose terms remain undisclosed to the public.
We formally demand:
- Immediate access to the process, including full documentation and the opportunity to submit a complete proposal
- Publication of evaluation criteria, including financial, operational, and legal benchmarks
- Direct dialogue with the Government of the Azores, with independent observers present
Should opaque practices persist, we reserve the right to escalate the matter to European regulatory bodies, including the Directorate-General for Competition of the European Commission, in defense of fair access and competitive integrity.
Contact: Oleg Evdokimov, Authorized Representative of the Consortium
+601114296335?”
To date, there is no evidence that the government has responded to Evdokimov. Exhaustive searches across Portuguese media, government sites, news archives, and Russian-language sources turn up no mentions of any reply, acknowledgment, meeting, email, or even rejection from the government, SATA, or any official.
Evdokimov and Melonaero are never referenced in any privatization-related statements, tenders, or parliamentary discussions.
He has been completely ignored. The government is focused on closing the deal with Newtour/MS Aviation. If they ever received anything from him, they almost certainly binned it.
Murkiness is not the taxpayers’ friend
If you are an Azores taxpayer, you likely have questions. Why is the government trying to do a deal with only one bidder if there’s potentially more than one? Why is the deal not being done transparently?
The process is being run with little public competition, published evaluation criteria, or financial disclosure from the selected bidder. The government extended the deadline twice — most recently to November 24, 2025 — without explaining why or publishing updates. Meanwhile, other serious bidders were not granted access, even after public declarations of interest and capital capacity.
The Azores Regional Government (led by President José Manuel Bolieiro, PSD/CDS-PP/PPM coalition) has consistently claimed that the process is being conducted with “maximum transparency” and without any opacity. However, the process — especially since shifting to direct negotiations with the sole bidder (Newtour/MS Aviation) in late 2024 — faced widespread, intense, and cross-party criticism for being highly opaque, confusing, and potentially illegal.
Unions (especially pilots via SPAC) repeatedly accused SATA Holding (a government-owned company) of blocking access to essential financial/operational data, citing excessive confidentiality clauses that turn the process “opaque and hostile.” They warned that prolonged opacity would weaken the company and could derail privatization entirely, risking a shutdown by the end of 2025 (EU deadline). Even the consortium accused SATA of a “blocking posture” in October 2025.
Opposition parties like BE (Left Bloc): referred to the deal as “a lack of transparency and confusion”; a “farsa” (farce) done in backrooms. The PS (Socialists), described as “conturbado e falhado” (turbulent and failed), conducted with “lack of transparency and opacity”.
Another excluded bidder Victorair consortium) accused the government of “illegalities,” mid-process rule changes (e.g., government suddenly assuming €400–600M debt), late entry of big-name investors (Newtour/MS Aviation), and failure to publish updated accounts (2024 full-year and 1Q25). They demanded oversight by the Tribunal de Contas (Court of Auditors) for clarity.
Media (and public perception) have also been active. Portuguese media widely report the direct negotiation phase as “obscure,” with delays, extensions, and key details (the exact offer price, the final debt assumption, the strategic plan) being kept confidential.
The airline seller is the Regional Government of the Azores, which owns SATA Group — the parent company of Azores Airlines. The process is overseen by a privatization jury appointed by the government, but no minutes, scoring sheets, or financial vetting documents have been made public.
Some of the pressure worked. Some documents were declassified, enabling better union-consortium talks and leading to the pilots’ 75% approval of a labor deal on November 9 — hailed as “historic” and enabled by greater transparency.
What started as a public tender devolved into closed-door deals with a single bidder, massive taxpayer debt absorption (€500M+ in total exposure), and repeated blocks on information sharing. Criticisms are near-universal from unions, opposition groups, rivals, and the media, far outweighing the government’s defenses.
Many see it as a rushed, taxpayer-bailout-heavy fire sale to avoid EU-forced closure, shrouded in secrecy to minimize public backlash. As of November 11, 2025, with the binding offer due in 13 days, core financial and strategic details remain hidden from the public and even some stakeholders.
What next?
What happens in the next 13 days (until November 24):
- The Newtour/MS Aviation consortium should finalize and submit its improved binding offer. It is expected to be around €15–20 million for a 51–76% stake, with the Azores government absorbing most or all of the airline’s ~€400–600 million debt and covering ongoing losses (potentially pushing total taxpayer exposure to €600+ million, including 2025 losses).
- Ongoing negotiations with remaining unions and workers’ commissions to lock in similar labor agreements.
- Jury review (led by Augusto Mateus) of the final proposal for compliance with public service obligations (maintaining key routes to North America, mainland Portugal, etc.), job protections, and EU state aid rules.
There’s a high chance the deal closes by the end of 2025. Pilot approval removing the most significant roadblock; the consortium says it’s “fully committed,” and both sides have invested too much politically and financially to let it fail now. Both sides are the government and the consortium, not taxpayers.
Small risks remain: Last-minute union issues, political opposition (e.g., the CDU calling for a suspension and accusing the deal of being an “obscure” taxpayer rip-off), or the jury rejecting the final terms. If it collapses, the government has signaled it would move to direct private sale or wind down operations. The latter is a clear threat to taxpayers, who will pay a lot, if not more.
Barring surprises, Azores Airlines will be privately owned by Newtour/MS Aviation before Christmas 2025, ending decades of public losses but at a massive cost to Azorean taxpayers. The airline will survive, restructured under private management. And, of course, taxpayers get shafted as usual.
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