Portugal Reassesses TAP Air Portugal’s Full Privatisation Plan

The Portuguese government is reconsidering its privatisation approach for TAP Air Portugal, amid mixed responses from potential buyers. Initial discussions with Air France-KLM, IAG, and Lufthansa Group outlined the government’s plan to retain a 51% stake. However, IAG has reportedly insisted on full control before it would consider a bid, as per the Spanish newspaper La Razón.

Infrastructure Minister Miguel Pinto Luz emphasized that TAP’s privatisation “will not be done at any cost.” While Portugal aims to recoup its EUR3.2 billion (USD3.4 billion) investment, the government now signals openness to a 100% sale, focusing on market-driven terms to maximize returns. Concerns have emerged that current offers may undervalue TAP, leading officials to explore postponing the sale until 2026, when the airline’s valuation might improve. A detailed report is underway to assess the financial impact of delaying the sale.

TAP’s financial challenges add complexity to the privatisation. The airline is split into two entities, with TAP SGPS, the state-owned segment, carrying significant debt. This debt burden has led to a legal dispute with Azul Linhas Aéreas Brasileiras, stemming from a high-interest loan dating back to 2016, which Azul now views as potentially default-prone.

In ongoing talks with the three European airline groups, the Portuguese government seeks offers aligned with its financial goals, avoiding undervalued bids or a competitive bidding scenario. As doubts grow regarding TAP’s ability to meet government expectations, officials are undertaking a careful review of the entire privatisation strategy, weighing the option of a delay to ensure a favorable outcome.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com