Portuguese Government Aims to Finalize TAP Air Portugal Privatization by 2024

Portugal’s Minister of Finance, Fernando Medina, recently addressed the media after the Economic and Financial Affairs Council meeting of the Council of the European Union, shedding light on the status of TAP Air Portugal’s privatization process. According to Medina, there is no rush to conclude the privatization in 2023, as that was never part of the government’s initial plans, as reported by Portugal’s SIC Noticias.

Medina emphasized that the primary focus is on ensuring a well-executed privatization that strengthens TAP Air Portugal’s strategic role in the country’s economy. The government aims to protect the economic interests of Portugal while facilitating TAP’s growth and contribution to the financial well-being of the Southern European nation.

Given the scale of the transaction, Medina acknowledged that the process will take several months to complete. At present, independent assessments of the carrier are being conducted by Ernest & Young (EY) and Portugal’s Banco Finantia, with their results expected in late August 2023. The outcome of these assessments will likely influence the stake the Portuguese government is willing to sell to the public.

Notably, various European airline groups, including Lufthansa, International Airlines Group (IAG), and Air France-KLM, have expressed interest in acquiring a stake in TAP Air Portugal. However, both Lufthansa and IAG have other ongoing considerations to address before making any potential acquisitions. Lufthansa recently finalized an agreement with the Italian government for the privatization of ITA Airways, while IAG is navigating antitrust concerns related to its partial acquisition of Air Europa.

Despite the interest from potential suitors, the privatization process remains a crucial undertaking for the Portuguese government. Medina emphasized the need for a transparent and law-abiding process to solicit multiple proposals and strengthen the government’s negotiating position to achieve the desired results for the country.

In summary, the Portuguese government is actively working on the privatization of TAP Air Portugal, with an expected completion target of 2024. The process is being carefully managed to protect Portugal’s economic interests and ensure TAP’s continued growth and contribution to the nation’s financial prosperity. Interested European airline groups are closely monitoring the situation, but the outcome will largely depend on the ongoing assessments and considerations within the companies involved.