In the summer of 2025, the government of Portugal relaunched a project to privatize national carrier TAP Air Portugal, with the goal of selling a large stake in the airline. This has of course been a rather drawn out process, and we’ve known that both Air France-KLM and Lufthansa Group had submitted binding offers for such an investment, with a decision expected imminently.
Well, it sounds like we now know how this is going to play out…
Lufthansa Group wins bid for TAP Air Portugal investment
Reuters is reporting that Lufthansa Group is set to win the bid for the purchase of a 44.9% stake in Portuguese flag carrier TAP Air Portugal. An official announcement is expected at the extraordinary cabinet meeting on Wednesday, October 14, 2026, and sources suggest it’s a done deal.
Why did Lufthansa Group win out over Air France-KLM? Well, it’s because Lufthansa Group is reportedly offering an all-cash deal, while Air France-KLM has a proposal that combines cash and shares in the airline group. The Reuters report suggests that Lufthansa’s stronger financial position was also a key factor.
We should learn some more details in the coming hours and days, so it’ll be interesting to see how this plays out. Of course an investment like this requires regulatory approval, so I’d expect that even if terms are agreed to, things could still change before all authorities sign off on the deal.
What are the implications of Lufthansa Group investing in TAP?
While I understand that Lufthansa Group maybe has stronger financials than Air France-KLM on the surface, I was certainly rooting for Air France-KLM to get the deal. I mean, if nothing else, Air France-KLM does a much better job with labor relations than Lufthansa Group does, and I feel like that should be worth something.
If Lufthansa Group is successful with all of this, how could this play out?
- Obviously owning a stake in TAP would greatly strengthen Lufthansa Group’s position in South America, where the airline group otherwise isn’t particularly strong
- While TAP is already in the Star Alliance, it’s not in the transatlantic joint venture, so it’ll be interesting to see if an effort is made for the airline to join; currently TAP undercuts the competition on price across the Atlantic, while that would stop if there were antitrust immunity, and fares and schedules are coordinated
- On some level, the incentive for an airline group to acquire another carrier is simply to keep the airline out of the hands of a competitor, given the extent to which long haul European aviation is controlled by the “big three” European airline groups
Bottom line
Lufthansa Group is expected to beat Air France-KLM when it comes to the bidding for TAP Air Portugal. The decision apparently came down largely to Lufthansa Group making an all-cash offer. Both Lufthansa Group and Air France-KLM have the same geographic upside with a TAP investment, though from a labor perspective, I certainly have to imagine this would’ve played out better with Air France-KLM.
What do you make of Lufthansa reportedly being the winning bidder for TAP Air Portugal?
So the big become even more bigger. How is that good for the consumer ?
This is not very good news - I’m a Delta Million Miler and was hoping for Air France-KLM to
win the bid and eventually have TAP become
part of Skyteam. Moreover I like TAP and despise Lufthansa’s lack of schedule consistency - and especially how they have so many strikes that shut down operations and have so little disregard for their customers that are affected. Who in their right mind knowing all this...
This is not very good news - I’m a Delta Million Miler and was hoping for Air France-KLM to
win the bid and eventually have TAP become
part of Skyteam. Moreover I like TAP and despise Lufthansa’s lack of schedule consistency - and especially how they have so many strikes that shut down operations and have so little disregard for their customers that are affected. Who in their right mind knowing all this would want to fly with them? Especially if you are originating or connecting through Germany?
Well this is unfortunate... definitely a short-sighted move to go with Lufthansa because their offer is all-cash. Hopefully AF-KLM can counter. Otherwise, best of luck being a second-tier member of LH Group, TAP.
Oh Crap !
Not sure why the "labor relations" is the factor that was brought up for this discussion but yeah, I would've also far preferred AF-KLM. They are just better airlines, better flag carriers, better cultural symbols, far bigger and standout identities. And, say what you will about TAP, but it has a personality. They should be working with someone bolstering it, not suppressing while losing your luggage.