Portugal's state-owned holding company Parpública confirmed on Wednesday that it had received two binding proposals for a 44.5% stake in TAP Air Portugal, from Air France-KLM and Deutsche Lufthansa. The bids mark the end of the third phase of the airline's partial privatisation, a process relaunched in 2025 by Prime Minister Luís Montenegro's government.
According to a statement from Parpública, the offers include both the purchase price and detailed industrial and strategic plans aimed at ensuring TAP's long-term sustainability. The government now has 30 days to analyse the documentation and produce a report. If further clarifications are needed, the deadline will be suspended until the requested information is provided.
Two bidders remain after IAG withdrawal
The privatisation process originally attracted interest from International Airlines Group (IAG), the parent company of Iberia, but IAG withdrew earlier this year, leaving only Air France-KLM and Lufthansa in the running. Both groups submitted their binding offers on Tuesday, the deadline for the third stage of the sale.
The decree law approved by the Portuguese government a year ago allows for the sale of up to 49.9% of TAP to private investors, with the state retaining a majority stake. Of that share, 5% is reserved for employees; any unsubscribed portion may also be acquired by the selected investor.
Infrastructure Minister Miguel Pinto Luz has expressed a desire to conclude the privatisation by September 2026. He has indicated that the chosen investor could begin sharing management responsibilities with the current board as early as 2026, although the actual capital injection is not expected until the summer of 2027.
The sale of a minority stake in TAP is part of a broader trend of European flag carriers seeking strategic partnerships to remain competitive. Both Air France-KLM and Lufthansa have been expanding their networks through acquisitions and alliances, and TAP's strong position on routes between Europe and Latin America makes it an attractive target.
Portugal's tourism sector has rebounded strongly since the pandemic, and TAP has returned to profitability. However, the airline still carries significant debt, and the government sees private investment as a way to secure its future without full privatisation.
The next steps will be closely watched by industry analysts and by other European carriers. If the government decides to proceed, it may invite one or both bidders to submit a final improved offer after reviewing Parpública's report.
