Air France-KLM and Lufthansa Submit Bids for TAP Air Portugal
Europe's two largest airline groups have submitted binding offers for a minority stake in Portugal's national carrier, advancing the government's privatization efforts that stalled earlier this year.
The Portuguese government's effort to privatize TAP Air Portugal has reached a critical milestone, with both Air France-KLM and Lufthansa Group submitting binding offers for the national carrier, according to a report.
Portugal is seeking to sell a 44.9 percent stake in the airline, with provisions allowing the government's ownership to potentially drop below 50 percent over time. Under the current proposal, employees would receive a 5 percent stake, leaving the state with 50.1 percent initially. The privatization process had stalled in early 2025 when the country's center-right minority government collapsed, though the coalition returned to power following elections in May.
While TAP Air Portugal has historically struggled with profitability, the carrier has shown improvement in recent years. The airline posted a record €1.6 billion loss in 2021 during the pandemic, prompting a government-funded €3.2 billion restructuring. Since then, the carrier has returned to the black, though with modest results — reporting profits of €65.6 million, €177.3 million, €53.7 million, and €4.1 million over the four years from 2022 through 2025.
The airline's strategic value lies primarily in its network strength to Brazil, Africa, and the United States — routes that could offer significant synergies for either European airline group. TAP has traditionally operated independently on transatlantic routes, often undercutting competitors with attractive fares across all cabins, including on one-way tickets.
The acquisition raises questions about how TAP might integrate into existing transatlantic joint ventures, which currently dominate North America-Europe flying and are organized largely by alliance. Such integration could fundamentally alter the Portuguese carrier's pricing strategy and market positioning. Additionally, any deal will face substantial regulatory scrutiny, given the competitive implications of consolidation in the European aviation market.
The binding offers from both airline groups represent a significant step forward in Portugal's second attempt to privatize its national carrier within the year.