Portugal Eyes Global Bidders in TAP Air Portugal Sale

Portugal is opening the door to global investors as it moves forward with the partial privatization of TAP Air Portugal. Prime Minister Luís Montenegro said the government expects interest from both European and non-EU airlines for a minority stake in the flag carrier.

While Montenegro did not name specific bidders outside the EU, Air France-KLM, IAG International Airlines Group, and Lufthansa Group have already held discussions with the government over the past year. The approved plan includes selling up to 49.9% of TAP, with 44.9% available to one or more investors and 5% reserved for employees.

Speaking in parliament on July 17, Montenegro suggested this could be the first step toward full privatization. TAP Air Portugal currently operates 83 aircraft, including A319s, A320ceos and neos, A321 variants, and A330-900neos. Some aircraft are wet-leased from partners such as Airhub Airlines, Avion Express, and Hi Fly Malta.

A major incentive for potential investors is TAP’s EUR471 million (USD549 million) in accumulated tax credits, which could be used to offset future tax obligations, according to Jornal de Negócios. However, legal liabilities pose a potential risk.

Future shareholders may inherit legal responsibilities tied to ongoing lawsuits. Notably, a dispute involving Azul Linhas Aéreas Brasileiras’ EUR178 million (USD207 million) loan from 2016 could impact buyer confidence. The Portuguese government, TAP, and Azul remain engaged in legal proceedings over the issue.

The privatization of TAP represents a pivotal opportunity for strategic investors looking to strengthen their presence in Europe’s aviation market.

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