Portugal has selected Lufthansa as the strategic investor in TAP Air Portugal, ending a lengthy competition between two of Europe’s largest aviation groups. The German airline group has offered €1.201 billion for a stake of up to 49.9% in the Portuguese flag carrier, with the transaction expected to be completed by early 2028.
The decision was announced on Wednesday, 14 October 2026, by Portuguese Prime Minister Luís Montenegro following a Council of Ministers meeting. Lufthansa emerged victorious over Air France-KLM after both groups submitted improved final binding offers.
Under the privatisation framework, 44.9% of TAP’s shares will be allocated to the selected strategic investor, while up to 5% will be reserved for employees. The Portuguese state will retain majority ownership of the airline.
According to Montenegro, Lufthansa’s financial proposal was 16% higher than that of its French-Dutch competitor and presented a lower degree of uncertainty.
“This is the best choice for the company’s future and the one that best protects the national interest,” the Prime Minister declared.
€2.55 billion valuation and new investment commitments
The Portuguese government estimates that the operation will generate €1.201 billion in its first phase, followed by €1.351 billion in a second phase, bringing the total direct valuation to €2.552 billion.
Montenegro described the valuation as significantly higher than independent assessments conducted in recent years and even recent months.
Beyond the financial offer, the government highlighted Lufthansa’s industrial development commitments, including expanding TAP’s fleet, passenger numbers, destinations, international connections and employment opportunities.
Governo seleciona a Lufthansa para aquisição de até 49,9% do capital social da TAP https://t.co/yot2oX0Wuc
— República Portuguesa (@govpt) October 14, 2026
The investment plans also include a new pilot training school in Tancos, an innovation centre in Aveiro and a corporate services centre in Santa Maria da Feira.
For the Portuguese government, joining Lufthansa represents an opportunity to integrate TAP into one of Europe’s largest aviation groups and the world’s fourth-largest airline group by revenue.
“Our ambition is to give TAP wings so that it can fly increasingly higher and further,” Montenegro said.
Finance Minister Joaquim Miranda Sarmento described the agreement as a significant structural reform, arguing that the investment would benefit Portugal’s economy through tourism, employment, aviation maintenance and industrial development.
Strategic importance of TAP’s transatlantic network
TAP’s extensive network connecting Europe with Brazil, Portuguese-speaking African countries and North America has been one of the main attractions for prospective investors.
Following the final round of negotiations, the Portuguese government sought guarantees that the airline’s development would extend beyond Lisbon, strengthening connectivity through Porto, Faro, the Azores and Madeira.
Lufthansa’s acquisition would further consolidate its position in European aviation, adding TAP to a portfolio that includes SWISS, Austrian Airlines, Brussels Airlines and ITA Airways.
The German group had already formally expressed its interest in TAP in November 2025, emphasising the two airlines’ longstanding relationship within Star Alliance and its existing investments in Portugal.
Lufthansa also previously highlighted its plans to develop aircraft maintenance activities in Santa Maria da Feira, with ambitions to expand its Portuguese workforce.
Privatisation process enters final stage
The government’s decision concludes a competitive process relaunched in 2025, following TAP’s renationalisation and restructuring during the Covid-19 pandemic.
The partial privatisation process followed approximately €3.2 billion in state support received by TAP during the pandemic, making its future ownership and financial sustainability a major political and economic issue in Portugal.
Three European aviation groups initially expressed interest in acquiring a stake: Lufthansa, Air France-KLM and International Airlines Group (IAG), the parent company of British Airways and Iberia.
IAG subsequently withdrew from the competition, leaving Lufthansa and Air France-KLM as the final contenders.
Despite Wednesday’s announcement, the acquisition is not yet completed. The parties must negotiate and finalise the contractual arrangements, while the transaction will also require regulatory approvals, including scrutiny by the European Commission’s competition authorities.
The government expects the process to be concluded by early 2028.
For Portugal, the agreement represents a major turning point in the future of its national airline, with the government betting that Lufthansa’s financial strength and international network will reinforce TAP’s competitiveness while preserving Portuguese majority ownership.
