Two major airlines submit final bids for TAP stake as Government begins evaluation
Air France-KLM and Lufthansa Group submitted their final binding offers on Wednesday for a 44.9% stake in TAP Air Portugal, closing the competitive phase of the privatization process. The decision now rests with the Portuguese Government, which must evaluate the improved proposals before selecting a strategic partner for the national carrier.
The Portugal State Holdings Management Company, known as Parpública, is now preparing a descriptive report on the improvements presented by both candidates. This document will determine the absolute final merit of each offer before being sent to the ministers of Finance and Infrastructure, according to an official statement.
What changes for TAP and for Portugal
The privatization framework allows for the sale of up to 49.9% of the flag carrier's capital. The structure reserves 5% for employees, with any unsubscribed portion available to the selected investor through a preference right. The Portuguese State will retain a majority stake of at least 50.1%, ensuring continued control over strategic decisions.
The Minister of Infrastructure and Housing, Miguel Pinto Luz, confirmed that the Government now has approximately 15 days to evaluate the proposals. A final announcement is expected by mid-October 2026.
Two proposals, two visions
The Minister of the Presidency, Leitão Amaro, stated earlier this week that the initial proposals were globally so close that the Government decided an additional negotiation round with both candidates would best serve national interests.
Price is naturally an important criterion, but not the only one. The privatization terms require a global evaluation covering routes, industrial plans, fleet development, maintenance capabilities, sustainable fuels, and labour commitments.
Air France-KLM offers Lisbon as exclusive Southern Europe hub
The Franco-Dutch group proposes positioning Lisbon as its exclusive hub in Southern Europe, strengthening the Atlantic bridge to Brazil and expanding transatlantic connectivity. The proposal is backed by Delta Air Lines and the SkyTeam alliance.
Key commitments include:
• Maintaining TAP as a Portuguese flag carrier with its identity preserved
• Expanding operations in Porto and other Portuguese cities
• A plan to incorporate at least 10% sustainable aviation fuel by 2030
• Creating a maintenance centre in Portugal in partnership with TAP Maintenance & Engineering
• Integration of approximately 9,000 existing TAP employees
Air France-KLM emphasized its experience working with state shareholders: the French State holds 27.98% of the group, while the Dutch State holds 9.13%.
Lufthansa emphasises Brazilian market and Porto region investment
The German group proposes strengthening Lisbon as a strategic Atlantic hub with a focus on South America, particularly Brazil, while preserving TAP's Portuguese identity.
Lufthansa highlights its track record of integrating airlines such as SWISS, Austrian Airlines, Brussels Airlines, and ITA Airways while maintaining their national identities. The group currently employs more than 500 people in Portugal and expects to exceed 1,000 employees by 2030.
A significant element of Lufthansa's presence in Portugal is independent of the TAP bid: Lufthansa Technik is constructing an industrial facility at Lusopark in Santa Maria da Feira, near Porto. The 55,000 square metre unit, dedicated to aircraft component repair and maintenance, represents an investment of hundreds of millions of euros and is expected to create over 700 qualified jobs by 2027, entering operation in 2028.
Next steps before a final decision
The Government faces several formal requirements before completing the privatization. The selection must receive approval from the Council of Ministers and clearance from European competition authorities.
Analysts at Bernstein estimated in July that a 44.9% stake in TAP could be worth approximately €700M, based on a total valuation of €1.5bn for the airline. Specific financial terms of the final offers have not been disclosed.
For passengers, the main immediate change after a decision would be a potential shift in airline alliance. TAP currently belongs to Star Alliance, the same group as Lufthansa. If Air France-KLM wins, TAP would move to SkyTeam, a transition that could affect frequent flyer programmes and partner airline connections.
