European Airline Giants Eye Portugal’s TAP as Privatization Looms
Portugal’s government has set its sights on privatizing at least 51% of the state-owned airline, TAP, with the aim of fostering growth in the country’s aviation sector. Finance Minister Fernando Medina made this announcement, specifying that potential buyers must be significant players in the aviation industry. Notably, several major European airline groups have expressed strong interest in TAP’s privatization, including Lufthansa, Air France-KLM, and IAG, the parent company of British Airways and Iberia.
A spokesperson for the Franco-Dutch airline holding, Air France-KLM, stated that the group holds “strong interest” in TAP’s privatization and eagerly awaits further details. Luis Gallego, CEO of IAG, expressed optimism about TAP’s potential within the group, saying, “We’ll have to study the process carefully, but we feel optimistic and believe that TAP can become another success story within IAG.”
Lufthansa also views this as an appealing opportunity, citing the potential complementarity of the two airlines, particularly TAP’s network of routes to and from South America, where the aviation market is experiencing significant growth. Statista data predicts that revenue in the South American flight market is set to reach nearly €23 billion this year, with projections of €26.8 billion by 2027.
Portugal’s Finance Minister emphasized the value of TAP’s “privileged connections” to Portuguese-speaking countries like Brazil, South America’s largest nation.
TAP has a history of moving between public and private ownership. It was last privatized in 2015 and then nationalized in 2020, with the government acquiring a 72.5% stake. TAP was valued at €244.4 million during this transition. Despite past challenges, the airline managed to break a four-year streak of losses in the previous year, recording a €65.6 million profit, with expectations of continued positive results in the current year.
The exact percentage of the airline that will remain under state ownership is yet to be determined. The government plans to finalize the privatization terms and conditions by the end of the year and complete the process by mid-2024, according to Finance Minister Fernando Medina.
