The Portuguese government is once again looking to sell off its flag carrier TAP, with the ruling party in favour of shifting 100% of the company to the private sector, while opposition politicians are calling for part of the airline to remain in public hands.
After years of attempted negotiations around the TAP’s future, Infrastructure Minister Miguel Pinto Luz has declared himself determined to avoid a situation in which the carrier repeatedly switches between public and private ownership or requires ongoing state intervention. But without a majority in parliament, and with both left-wing and right-wing opposition parties pitched against the plan, the goal of selling all shares is unlikely to be reached.
With the pressure on to commence the sale in March 2025, and completion targeted by Q3 2026, media reports predict the situation will resolve itself into a 49% acquisition by the investors, with the government retaining a majority stake.
Are there any interested buyers?
Interest in TAP has already been expressed by a range of potential buyers, who believe the Portuguese firm, which opened another route to Brazil’s Florianopolis last year, holds important keys to the valuable South American market. Air France-KLM, British Airways owner IAG, and Lufthansa are all waiting in the wings.
Back in September, the latter was reportedly gunning to spend between €180 and €200 million on 19.9% of the Portuguese asset, which would have kept it below the European Commission’s approval threshold of 20%. Having acquired 41% of ITA in January, the German group now boasts five network airlines (alongside Lufthansa, Swiss, Austrian and Brussels Airlines) – a situation that rivals will be keen to contain.
This could set the scene for an interesting competition. If reports are correct and Portuguese ministers are looking to sell at least 49% of TAP, or a minority stake considerably larger than 19.9%, then Air-France-KLM could be well positioned to out-negotiate Lufthansa. On the other hand, IAG recently failed to acquire Air Europa due to conditions the European Union imposed and therefore it could well be seeking a revenge purchase.
Financial freedom or state control?
Ultimately though, the success of any future deal depends on Portugal’s ability to make up its mind about its strategic priorities. Does it want to rid itself of the long-term financial shackles that TAP, for some, represents? It is after all facing a €90 million loan recall from Azul Airlines, and is operating in a market where currency devaluations and foreign exchange losses meant the carrier’s net income fell by €85 million last year.
Or does the government want to retain an element of state control over seat capacity in and out of Lisbon and be able to guarantee hub traffic at the brand new international airport being built for the capital? For now, aviation commentators can only watch this space.
