Portugal to Sell Majority Stake in National Airline TAP

Portugal’s Finance Minister Fernando Medina kicked off the long-awaited sale of TAP Air Portugal Thursday with the announcement that the government would sell a 51% stake in the state-owned airline to the highest bidder.

In addition to monetary value, the Portuguese government seeks an investor that wants to grow TAP and its Lisbon hub, guarantee jobs, and bring additional flights to secondary airports in the country, including Porto. The government did not specify how much it values TAP at; Portugal nationalized the airline as part of its Covid aid package to the carrier during the pandemic.

“We want large-scale investors from the aeronautical sector, alone or in consortia headed by them, that are aligned with our strategic goals,” Medina said. “We do not seek to attract pure investments of a financial nature that are looking to get into TAP to then sell it or sell parts of it and we wish to reiterate TAP’s strategic contribution to the country.”

Air France-KLM, International Airlines Group — owner of British Airways, Iberia, and other airlines — and the Lufthansa Group have all expressed interest in TAP. The Portuguese airline’s Lisbon hub is the ideally located for Europe-Latin America connections, as well as for connectivity to Africa. The hub is seen as a sought-after prize among the large European airline group’s as they jockey for an ever greater share of the market.

“TAP has a very strong position geographically at the southernmost point in Europe towards South America, and they do have a very strong network to Brazil with 11 cities online nonstop out of Lisbon,” Air France-KLM CEO Ben Smith said in May. “So it’s very interesting, and could be potentially eventually accretive to our bottom line performance.”

Portugal will first select advisors for the sale first with the aim to finalize the selection criteria by the end of the year, Medina. Talks with interested buyers will also begin but, based on the timeline he outlined, a deal is unlikely until sometime in 2024.