Lisbon has moved a step closer to privatising its national carrier. On Friday, António Leitão Amaro, Portugal's Minister of the Presidency, confirmed that the government will open talks with both Air France-KLM and Lufthansa, the two groups that submitted binding offers for TAP Air Portugal at the end of July.
Speaking to the Lusa news agency, Leitão Amaro said the two bids, though structured differently, came in with "overall valuations that are very close." That proximity, he argued, justifies a "negotiation effort" to extract improved proposals from both contenders before the government selects a single bidder for the final stage of the process.
The announcement follows a report delivered on 1 September by Parpública, the state holding company that manages Portugal's equity stakes. Parpública had 30 days to assess the binding offers and submit its analysis to the government, which now has the option to invite one or both bidders to refine their proposals.
Two bidders remain after IAG withdrawal
The partial privatisation, relaunched in 2025 by Prime Minister Luís Montenegro's government, originally attracted three suitors. International Airlines Group (IAG), the parent of Iberia, pulled out earlier in the process, leaving Air France-KLM and Lufthansa as the only contenders. Both submitted their binding offers on 29 July, the final day of the deadline.
Under the decree-law approved a year ago, the state can sell up to 49.9% of TAP's share capital to private investors, with 5% of that stake reserved for employees. The Portuguese state would remain the majority shareholder, a structure designed to balance private efficiency with public control over a strategically important airline.
Infrastructure Minister Miguel Pinto Luz has previously indicated that the chosen investor could assume joint management responsibilities alongside the current board as early as 2026. However, the actual capital injection is not expected until the summer of 2027, reflecting the complexity of the transaction and the regulatory approvals required.
The outcome will be closely watched across Europe's aviation sector. A successful deal would mark a significant shift for TAP, which has undergone restructuring in recent years and now faces renewed competition on transatlantic routes. For Air France-KLM and Lufthansa, securing a stake in TAP would strengthen their networks to Brazil, Africa, and North America, where the Portuguese carrier holds a strong position.
The Portuguese government has stressed that it will weigh not only the financial terms but also strategic fit, including commitments to maintain Lisbon's hub status and protect jobs. The negotiation phase is expected to be intensive, with both bidders likely to refine their offers to gain an edge.
Analysts note that the close valuation of the two bids gives Lisbon unusual leverage. By pushing both groups to improve their terms, the government hopes to maximise the return for taxpayers while ensuring the airline's long-term viability. The final decision, expected in the coming months, will set the course for TAP's future and could reshape the competitive landscape of European aviation.
