Air France-KLM has announced its interest in a partial buy-out of TAP Air Portugal, the Portuguese national flag carrier. If the French-Dutch multinational is successful it will represent quite a coup amid what has been a keen and ongoing competition to acquire TAP Air Portugal over several years.
A statement by Air France-KLM’s CEO Ben Smith, seen by Bloomberg, praises the Portuguese airline as “”an emblematic company which has built a powerful hub in Lisbon that is open to the world” and says that the group “stands ready to present its candidacy as part of the TAP privatization process.”
Successive Portuguese governments have made attempts at a sale of TAP but the process has been hindered by legal hold-ups and disagreements over the level of influence the nation wants to maintain over guarantees for its hub airports. Officials are said to be considering selling 49% of the company, allowing them to keep hold of a majority stake and satisfy public demands around TAP’s branding, image and status.
Previous potential buyers, who may yet join the latest mêlée, have included Lufthansa Group and IAG. Despite profitability and loan recall issues, the Portuguese airline is widely viewed a desirable acquisition. That’s largely thanks to its existing South American route network that offers a readymade gateway for other carriers into the growth market on the continent.
Using ch-aviation data, Simple Flying has calculated that the airline’s assets also include 30 Airbus A320s, 26 Airbus A321s, 22 Airbus A330s, and three Airbus A319 narrowbody aircraft, with an average age across that 81-strong fleet of 12.1 years.
For a 19.9% stake that would keep Lufthansa under the European Union’s antitrust radar, Lufthansa was reportedly prepared to offer between between €180 and €200 million in September 2024. IAG has also been sniffing around but its determination to build its stake up to a majority holding is viewed by some as a barrier to its offer being accepted.
“Over time, we would like to have a path towards a majority because it would give the business the possibility to grow without the investment of other shareholders. We don’t know if we’ll participate, it depends on the conditions,” IAG director Jonathan Sullivan reportedly told Portuguese journalists.
Smith on the other hand, representing Air France-KLM’s vision said: “We want to maintain and develop TAP’s strong brand and highly valuable hub, drawing on the expertise of the company’s staff,” adding that the group intends “to strengthen the connectivity of the entire country, including secondary cities, and invest durably in the local economy”. Words that are likely to resonate with Portugal’s new centre-right government as it negotiates not only the sale but public and opposition opinion.
