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TAP's future may hang on elections

 

TAP, the once-before and now-again state-owned airline of Portugal may see its future decided in Portugal's January 30th legislative elections, with the two leading parties seeing different fates for the airlines.

It's a political issue now because after re-nationalizing the airline in 2020 to keep it flying, and providing new capital and operating funds with permission from EU competition and economic authorities, the government is not permitted to give it further support, leaving it in a sink-or-swim, or perhaps crash-or-fly situation.

The airline's fate came up In a debate earlier this week between Portugal's Prime Minister, Antonio Costa and main rival in the elections, Rui Rio. Rio, who leads the Social Democratic party, which is right-of-center, wants the airline sold off entirely, and "as soon as possible." Costa, leader of the left-of-center Socialist party, wants the government to keep 50% of the shares and says "there are, fortunately, already other companies interested in acquiring” the other 50%.

He didn't name any, but speculation over the past year has included suggestions that Turkish Airlines might be interested in taking control; other reports have said that the Portuguese government might be reaching out to Germany-based Lufthansa Group. Both airlines are Star Alliance members, as is TAP. Another possibility is that IAG, which owns Iberia and Vueling in Spain and has just broken off a deal to buy Air Europa might be interested in TAP instead.

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