Air France-KLM Eyes TAP Stake in Portugal’s Privatization

Air France-KLM has expressed interest in Portugal’s national airline, TAP, as the government weighs options for its privatisation. According to a source familiar with the discussions, the airline group is open to different scenarios, including purchasing a minority stake, aligning with Portugal’s shift toward a flexible privatisation strategy.

Portugal’s minority government is currently consulting with potential investors to gauge interest and understand their views before finalising a privatisation plan. In addition to Air France-KLM, other potential buyers include Lufthansa and IAG, owner of British Airways. Each has voiced interest, especially as TAP offers valuable assets such as strategic connections from its Lisbon hub to markets in Brazil, Portuguese-speaking Africa, and the United States.

Portugal’s Prime Minister, Luis Montenegro, recently suggested that a partial sale could be on the table, softening an earlier stance advocating for full privatisation. However, the sale will need parliamentary approval, where the opposition has vowed to reject any move toward a majority stake sale.

European carriers are increasingly looking at mergers and acquisitions to manage high operational costs, though the European Commission has become wary of further consolidations, citing concerns over dominance among Europe’s three largest airline groups. Air France-KLM recently acquired a 19.9% stake in Scandinavian carrier SAS and appears open to a similar approach with TAP, allowing flexibility if needed.

As consultations progress, Air France-KLM’s flexibility on the type of stake it acquires could play a decisive role in the government’s final decision on TAP’s privatisation strategy.

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