Air France-KLM Considers Options in TAP Privatization, Open to Minority Stake

Air France-KLM has expressed interest in participating in the privatization of Portugal’s national carrier, TAP Air Portugal, and is open to various options, including a potential minority stake, according to sources close to the matter. The Portuguese government, currently in the final stages of consulting potential buyers, is considering options that may include either partial or full privatization. Other interested parties include Lufthansa and British Airways’ parent company, IAG.

While Prime Minister Luis Montenegro initially advocated for a full privatization of TAP, he recently indicated that a partial sale could also be viable. The decision must pass through parliament, where opposition from the Socialist Party suggests there may be resistance to a majority stake sale. However, Air France-KLM is reportedly open to diverse ownership structures, including holding a minority stake.

For Air France-KLM, TAP’s network of connections to Brazil, Portuguese-speaking Africa, and the United States from Lisbon is highly attractive. This interest comes on the heels of Air France-KLM’s recent acquisition of a 19.9% stake in Scandinavian airline SAS, underscoring its strategy to expand selectively in Europe.

Lufthansa CEO Carsten Spohr also recently met with Portuguese officials to express his company’s interest in TAP, specifically eyeing a stake just below the 20% threshold, which would avoid triggering a review by the European Commission. Consolidation in the European airline market is viewed as essential by industry leaders to counter rising operational costs, though European regulators remain cautious about potential market dominance among the largest carriers.

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