Both Lufthansa Group and Air France/KLM submitted binding bids last week for a stake of up to 49.9% of TAP Air Portugal, and the Portuguese government agency managing the sale now has 30 days to make a decision.
The decision could favor either group, or it could request modifications in the bids from one or both parties. Portuguese officials have indicated they would like the process to move quickly and close by the end of the year.
Conditions baked into the sale are that TAP must continue its main hub at Lisbon and maintain full service at Portugal’s other mainland airports as well as its island territories. Those are Portugal’s main goals, aside from retrieving some of its investment in the airline after it was renationalized in 2020.
The government will—at least for the immediate future—hold onto the controlling 50.1% of shares. The actual tender is 44.9% with 5% set aside for purchase by employee groups, but if those are not claimed, they will go to the winning bidder.
For Lufthansa, which recently added ITA Airways to its portfolio, TAP would give it its westernmost hub. Air France/KLM’s hub strategy would be less affected, but for either airline, the big prize is TAP’s deep connections with routes to Brazil and to Portuguese-speaking parts of Africa.
