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 within a year or so. All too often, not much comes of these kinds of projects, though it seems like this is moving along nicely.
In early April 2026, we learned how two major airline groups had submitted non-binding offers to invest in TAP. We now know that this is moving forward, as both airlines are being invited to make binding offers, so let’s cover all the details.
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TAP Air Portugal privatization effort underway
Portugal’s government is currently working on an effort to privatize TAP Air Portugal, with the goal of selling a 44.9% stake, with the possibility to give up a majority stake over time. As part of this, employees would also be offered a 5% stake in the company (meaning that the government would own 50.1% of the company).
Last summer, Prime Minister Luis Montenegro stated that he’s “convinced that there will be many interested parties.” For years there has been talk of privatizing TAP, so this is only the latest such effort, and it’s anyone’s guess how this plays out.
The last round of privatization efforts stalled in early 2025, when the country’s center-right minority government collapsed. The coalition returned to power after a May 2025 election, but didn’t have a majority in parliament, potentially causing a sale to be blocked.
Historically, TAP hasn’t been a terribly profitable airline, but its performance has improved over time. In 2021, the airline reported a record €1.6 billion loss, following the coronavirus pandemic. This caused a restructuring, which saw the government invest €3.2 billion in the company.
The airline has returned to profitability in recent years, though we’re talking about fairly mild profits. The company’s profits over the past four reported years (2022-2025) have been €65.6 million, €177.3 million, €53.7 million, and €4.1 million.
In looking for a partner in this privatization, the government obviously hopes for as many synergies as possible, to improve the company’s long term prospect of profitability.
Last summer, Infrastructure Minister Miguel Pinto Luz stated that “we believe we can complete the privatization within a year,” emphasizing that even airlines from outside the European Union could express interest.
Air France-KLM & Lufthansa Group are in the running
While TAP Air Portugal isn’t independently some massively profitable airline, the company offers some significant synergies for other airline groups. Specifically, TAP has a strong network to Brazil, to Africa, and to the United States. This obviously holds significant strategic value for several airlines. For that matter, a large goal with acquisitions is simply to prevent competitors from getting in on the action instead.
We know that all three of the major European airline groups — Air France-KLM, IAG, and Lufthansa — had been interested in TAP Air Portugal at one point or another, primarily due to the carrier’s strength in Brazil, with the Africa network being a secondary strength.
The challenge is, it’s kind of hard to figure out how North America operations would complement the existing arrangements of airline groups. Obviously North America to Europe flying is heavily dominated by joint ventures (split by alliance, sort of), which have a lot of pricing power.
Historically, TAP has operated pretty independently to North America, often undercutting other carriers on price, with attractive fares in all cabins, including for one-way flights. Could we see TAP join one of the major joint ventures? Obviously it would totally change the carrier’s pricing model and market position.
Then there’s the whole issue of regulatory approval. Getting regulatory approval for such a deal will be no small task, given the number of parties that have to sign off on agreements like this, and the concessions required.
Several weeks ago, we learned how both Air France-KLM and Lufthansa Group submitted non-binding offers to invest in TAP. That makes sense, since both companies have a lot to gain from the airline in terms of their existing geography and networks.
Meanwhile IAG had shared that after “careful consideration,” it decided not to proceed with attempting to invest in TAP, instead focusing on growth opportunities within the existing group.
The government has now had time to review these offers, and both companies are advancing to the next round, as they’ve met the criteria. The expectation is that the two airline groups will now have 90 days to submit binding offers, and the government hopes to make a final decision on a deal in August or September 2026.
Obviously both airline groups are now trying to make their case for why they should be able to take over the airline. Air France-KLM CEO Ben Smith CEO recently (smartly) made the argument that a deal with the company would be more likely to result in labor peace, and it’s also what pilots at TAP have come out in favor of, given the mess that is Lufthansa Group labor relations.
Bottom line
The government of Portugal is looking to privatize TAP Air Portugal, initially hoping to sell a 44.9% stake (with an additional 5% going to employees), but the government is open to giving up majority control over time. While the goal of privatization has been there for a long time, this is now closer to becoming a reality.
Both Air France-KLM and Lufthansa Group have expressed interest in a deal with TAP, and their non-binding offers were reportedly similar. Now the airlines have 90 days to submit binding offers, and then the government is expected to make a decision in August or September 2026. I’m rooting for Air France-KLM over Lufthansa Group here, but we’ll see how this plays out.
How do you see TAP’s privatization plans evolving?
Everything Lufthansa touches turns to $hit.
While unavoidable, I’d hate for TAP to be sold to any of the 3 airline groups. I find very attractive J tickets for EU to US with the added bonus of an overnight stopover in Lisbon when I want.
TAP fits in better with the star alliance network
Let’s see if LH can even get anyone to come to work to put this proposal together first
The Achilles Heels in TAP is actually Lisbon Airport. Old and not efficient at all.
Iberia is starting to get its grip in Brazil besides being omnipresent in Spanish Latin America.
and LIS does not need to be a major TATL hub other than to/from Brazil where cultural ties between Brazil and Portugal give Brazil a lead.
TP plus either AF/KL or LH Group supplements what they cannot fully build out at AMS/CDG or FRA/MUC/ZRH to Brazil.
and it is precisely because LIS is "full" that it will make flights there profitable. The chances of increasing capacity at major European airlines is as much as...
and LIS does not need to be a major TATL hub other than to/from Brazil where cultural ties between Brazil and Portugal give Brazil a lead.
TP plus either AF/KL or LH Group supplements what they cannot fully build out at AMS/CDG or FRA/MUC/ZRH to Brazil.
and it is precisely because LIS is "full" that it will make flights there profitable. The chances of increasing capacity at major European airlines is as much as new runways being built at major coastal US hubs - ZERO.
Portugal just has to decide which alliance will give it better returns since they are selling a large minority stake.
LTD says, "it is precisely because LIS is "full" that it will make flights there profitable."
And that applies to other airports, right? Too funny.
@Tim, I don't understand the point of your comment. Brazil isn't quite Guatemala, it's the seventh most populous country in the entire world with a growing economy and a tourism industry with enormous potential (just 9 million foreign visitors last year- Greece's population is 95% smaller but it receives 400% more tourists). How exactly are they going to capitalise on that potential without room for additional flights?
TP is trying to be a full-service network carrier competing w/ alliances which have much larger hubs.
If TP focuses on what it does best, including Brazil and Africa, then the alliance and the Portuguese government makes more money by allowing TATL connecting traffic to flow through other hubs.
and, yes, rebel, full airports generally drive up yields. Not sure why you think I would suggest any differently.
So you're saying that TAP should focus on connecting Brazil with Europe and do that without flying across the Atlantic? WTAF?
you do realize that the Atlantic DOES separate Europe from Brazil?
and you also realize that hubs, even within alliances, have areas in which they are each stronger?
No one says that TP shouldn't fly to NORTH AMERICA but that the focus should be on doing what TP does best which is focus on Brazil and Africa, the latter of which involves connecting N. America.
TP does not need to focus on connecting a bunch of cities BEYOND LIS to N. America although some make sense.
I never wrote anything about North America- but you mentioned that 'TATL' traffic is somehow unhelpful for TAP at the same time as saying that they should intensify their focus on Brazil!! You've got to decide whether you believe that flights between Europe and South America are actually transatlantic!!
I do think AF/KLM is probably the better option for TAP although being Star Alliance is a hurdle.
Also with approval Brussels has a strong African market and I wonder if that'd mean TAP or Brussels would have to give up routes to get regulatory approval whereas AF/KLM doesn't really have a strong African Network.
I think TAP would also be a good fit for SkyTeam and slot right into their network as...
I do think AF/KLM is probably the better option for TAP although being Star Alliance is a hurdle.
Also with approval Brussels has a strong African market and I wonder if that'd mean TAP or Brussels would have to give up routes to get regulatory approval whereas AF/KLM doesn't really have a strong African Network.
I think TAP would also be a good fit for SkyTeam and slot right into their network as it feels very much like SAS was within Star Alliance. There but not really considered an equal partner
Unlike others I see LH in pole. Portugal wants TAP to stay relevant, LH has proven they can do that. Talk to the Netherlands if they feel Air France has treated KLM right. Talk to Austria and Sui about LH. Also, Lis can hope for a lot of feeder traffic to southamerica from LH, will France route their Pax there? Infact, with AF, TAP will lose German and Austrian pax from their LH codeshares. The...
Unlike others I see LH in pole. Portugal wants TAP to stay relevant, LH has proven they can do that. Talk to the Netherlands if they feel Air France has treated KLM right. Talk to Austria and Sui about LH. Also, Lis can hope for a lot of feeder traffic to southamerica from LH, will France route their Pax there? Infact, with AF, TAP will lose German and Austrian pax from their LH codeshares. The LH home markets are by far bigger then Fra/NL. And then there are the alliances. Latam is sky. I don’t see how Portugal and Lis will gain between IB und Latam and a star alliance which will then operate their own South America routes.
If you can’t even get you alliances right, you’re obviously not qualified to speak
I think this is a good point. Factually LA is not Skyteam (they’re not in any alliance since leaving Oneworld) but they are certainly moving towards Skyteam with their DL JV, partnership with VS, and dropping some Oneworld partnerships (eg. AS). LA doesn’t currently have any major star alliance partners. If AF/KLM acquired TP and formed a Europe-South America JV with LA (potentially adding in VS as well) they would dominate all Europe-South America travel....
I think this is a good point. Factually LA is not Skyteam (they’re not in any alliance since leaving Oneworld) but they are certainly moving towards Skyteam with their DL JV, partnership with VS, and dropping some Oneworld partnerships (eg. AS). LA doesn’t currently have any major star alliance partners. If AF/KLM acquired TP and formed a Europe-South America JV with LA (potentially adding in VS as well) they would dominate all Europe-South America travel. I would expect this would have DL’s blessing as well given their ownership stakes.
LA partner with airlines from across alliances and I suspect AR would veto any attempts to join Skyteam (in fact I can also envisage Aeroméxico being less than enthusiastic about such a development)
Doesn't the Lufthansa Group count as a major *A partner?
TAP would probably had to give up more slots in Lisbon should it be sold to LH group. Labour relations is something extremely important for TAP and the record of LH in that matter is appalling. TAP has not benefited that much over the years from star alliance. Furthermore, LH shut down a company overnight. I can't possibly imagine LH is even serious about buying TAP when in the middle of a process they shut...
TAP would probably had to give up more slots in Lisbon should it be sold to LH group. Labour relations is something extremely important for TAP and the record of LH in that matter is appalling. TAP has not benefited that much over the years from star alliance. Furthermore, LH shut down a company overnight. I can't possibly imagine LH is even serious about buying TAP when in the middle of a process they shut down a company overnight. What for me is unclear is how TAP would keep up its North American focus as well when they enter AF/KL or LH. TAP has over the years increased dramatically its routes in the USA. TAP saw an increase of nearly 10% in passengers from north america in 2024 and that was before LAX. They will further expand in the USA - launching Orlando and in Brazil this year - with São Luis and Curitiba.
I don't think anyone's too worried about TAP's North American operations - they're neither high volume nor high yielding. Similarly, their African network is tiny compared to those of AFKL and LH/SN. This is all about Brazil.
the Portuguese government clearly wants to protect what TP has done for the country and the chances are quite high that AF/KL can make a better case for doing that than the LH Group which continues to struggle to make its core operations work.
Portugal is geographically well suited to feed southern Europe flights from the Americas and could benefit much more than Italy and ITA
I don't expect LH Group will go down w/o...
the Portuguese government clearly wants to protect what TP has done for the country and the chances are quite high that AF/KL can make a better case for doing that than the LH Group which continues to struggle to make its core operations work.
Portugal is geographically well suited to feed southern Europe flights from the Americas and could benefit much more than Italy and ITA
I don't expect LH Group will go down w/o a fight but they are at a disadvantage because of the chaos in their own company
I still don't understand though. If TAP is doing fine now as a nationalized airline, why must it become private? Can it not just continue on as is, performing decently?
I think EU State Aid rules require TAP to be privatized within a certain time period. The EU has rules around Governments subsidizing private businesses, which is what they did when TAP was initially bailed out. Others please correct me if I have this wrong.
Pedro, you are wrong. EU state aid rules do not require TAP to be privatised.
A company restructuring was imposed. Privatising it is a political choice. It happened twice in the past (TAP vs Swissair and TAP vs Neelman). Let's hope this time the job is properly done.
IAG/ basically BA & IBERIA and partners have the right idea.............Total Control or they walk away. TAP will end up being another case of ALITALIA with Government Interference throwing up roadblocks along the way. The Portugal to Brazil Market may be lucrative but iAG will be better off with SPAIN to South America for better coverage. The Lisbon Airport is a Clusterf* on a good day so that is also an issue.
That was an excuse. Total control was never an option. They knew well that PT would never sell to IAG. And they pulled out, rightly so. For PT the only benefit of having IAG continuing in the process would be to increase competition. But politically it would be unthinkable to sell TP to IAG, minority stake or total control.
Selfishly as an American I hate this. For the last several years TAP has been very underrated based on cost and experience. Basically checks all the long-haul business class expectations/experience for half the price of most of its competitors. Food is better then a lot of its competition too. Transiting in Lisbon is usually quite easy too.
LIS has had some immigration/customs issues with construction, but otherwise agreed; really impressed by TAP’s a321 lie-flat J product for EWR-OPO, for instance.
Totally. I was just looking for fun. I can fly roundtrip on TAP from Boston next week to basically anywhere in Europe for more than half the cost as our big 3 here. Besides fancier lounges, nothing is really different in the experience besides significantly better food on tap lol.