The Portuguese government has received the state holding company Parpublica's assessment of the binding bids submitted by Air France-KLM and Lufthansa for a 44.9% stake in the flag carrier TAP. This marks a significant step towards the privatization of TAP, which was revived in July 2025 and is aimed to be completed by the end of 2026. The Finance Ministry indicated that the government will now analyze the document and announce its position, potentially leading to the selection of a winning bid or inviting improved final offers from one or both bidders. The final decision will not solely depend on the financial offer but also on the bidder's capacity to expand TAP's international footprint and enhance its competitiveness, as per the government's criteria.
Both Air France-KLM and Lufthansa submitted their binding offers, which included strategic industrial plans and financial proposals, on July 29, 2026. While the specific details of these offers have not been disclosed, Bernstein analysts estimated the 44.9% stake to be worth approximately €700 million ($798 million), valuing TAP at about €1.5 billion. The privatization rules also stipulate that a further 5% of the stake is reserved for employees, with any unsubscribed shares going to the reference investor, potentially bringing the total private stake to just under 50%. The Portuguese state intends to retain majority control for now, with the capital injection from the sale not expected until summer 2027.
TAP's primary appeal lies in its strategic Lisbon hub, which offers lucrative flight slots connecting to Brazil, Portuguese-speaking African countries, and the United States. These routes are crucial for Portugal's diaspora, tourism, and investment. Air France-KLM has proposed making Lisbon its sole southern European hub, integrating TAP into the SkyTeam alliance and its transatlantic joint venture with Delta, which would entail TAP leaving the Star Alliance. In contrast, Lufthansa has pledged to keep TAP within the Star Alliance, operating it as another hub alongside its existing portfolio of airlines like SWISS, Austrian Airlines, and Brussels Airlines. The government's decision will be guided by eleven criteria, including technical and management experience, financial sustainability, and an "ambitious and well-founded" industrial plan, with a focus on maintaining connectivity to the Azores, Madeira, Brazil, and Portuguese-speaking Africa, as well as keeping TAP's headquarters in Lisbon.
The Minister for Infrastructure, Miguel Pinto Luz, has expressed a desire to conclude the process in September 2026. Parpublica's report serves as an assessment and not a final verdict, allowing the government the flexibility to request improved offers or even reject both proposals if they do not meet the published criteria. The current privatization attempt follows an earlier stalled effort and has been prioritized by the government after TAP posted consecutive years of net profit, attracting significant interest from bidders. The sale is mandated by a European Commission decision from 2022 that bars further state investment after a €3.2 billion recapitalization in 2021.
