In a significant development for the European aviation sector, Germany's Lufthansa Group has formally expressed its interest in acquiring a stake in TAP Air Portugal. This move places the German carrier in direct competition with the Air France-KLM consortium, which also submitted a bid, setting the stage for a major acquisition battle.
The Race for TAP Intensifies
The Portuguese government, which nationalised TAP during the Covid-19 pandemic, announced in September its plan to privatise a significant portion of the airline. Lisbon is seeking a major international airline to purchase most of the 49.9 percent stake in the carrier. TAP is among the few remaining state-owned airlines in Europe, making it an attractive asset for larger aviation groups.
Lufthansa, Europe's largest airline group by revenue, confirmed on Thursday that it had submitted a formal bid to the state holding company that owns TAP. Lufthansa CEO Carsten Spohr stated, "Our goal is to strengthen Portugal's global connectivity, preserve TAP's Portuguese identity, and ensure the airline's sustainable growth." He further emphasized TAP's strategic importance to the European aviation industry and positioned Lufthansa as the ideal long-term partner for Portugal.
Strategic Importance and Key Players
The appeal of TAP Air Portugal largely stems from its valuable network of flight routes, particularly to Brazil and Portuguese-speaking African nations. The government in Lisbon has made maintaining these specific global connections a priority in any potential deal.
This is not the first time TAP has attracted suitors. The IAG group, the parent company of British Airways and Iberia, has previously expressed keen interest in taking a stake. With Lufthansa's bid now official, three of Europe's dominant aviation powerhouses—Lufthansa Group, Air France-KLM, and IAG—are all circling the Portuguese carrier. Lufthansa's portfolio already includes airlines such as Eurowings, Austrian Airlines, Swiss, and Brussels Airlines, and it recently acquired a stake in Italy's ITA Airways, the successor to Alitalia.
Financial Revival and Future Prospects
The bidding process comes at a promising time for TAP's financial health. On Wednesday, the Portuguese airline reported that it had flown back into profitability during the July-September period, booking a healthy profit. This return to the black makes the airline an even more attractive investment opportunity.
Lufthansa has outlined that after an initial acquisition of a minority stake, its intention is to establish a long-term partnership with Portugal's national airline. This approach suggests a strategy focused on integration and collaborative growth rather than a complete takeover, aligning with the Portuguese government's conditions for the sale.
The outcome of this high-stakes race will significantly reshape the competitive landscape of European aviation, determining which major group gains control over TAP's strategic network and assets.
