Portugal plans to privatize TAP in 2025

23-12-24

The Portuguese government has announced its intention to privatize national airline TAP in 2025, after receiving interest from more than a dozen potential buyers. This decision follows the approval in September 2023 of the sale of at least 51% of the company, a process that was delayed due to early elections in March 2024, won by a center-right alliance.

Infrastructure Minister Miguel Pinto Luz stated that the privatization process will begin in 2025 and that discussions have been held with all interested parties. He stressed that TAP has improved its financial situation, with operating results that equal or exceed its European competitors. He also assured that, regardless of the privatization model to be adopted, the TAP brand, the Lisbon hub and strategic routes to the Portuguese diaspora in countries such as Brazil, Angola, Mozambique and the United States will be preserved.

Prime Minister Luis Montenegro, who previously advocated full privatization, has recently indicated that a partial sale is also a viable option. Among those interested in acquiring a stake in TAP are both domestic and international companies, including Air France-KLM, Lufthansa and the IAG group, which owns British Airways. Lufthansa is reportedly considering acquiring a 19.9% stake in TAP, thus avoiding the 20% threshold that would require European Commission approval. Air France-KLM has said it is open to various options, including the acquisition of a minority stake.

In parallel to these privatization plans, TAP has announced the expansion of its routes to the United States. From May 2025, the airline will operate flights from Lisbon to Los Angeles and from Porto to Boston, increasing its competition with airlines such as Iberia and British Airways of the IAG group. Currently, TAP already offers flights to several U.S. destinations from Lisbon and Porto, and has increased its seat offering between Portugal and North America by 6% compared to 2023.

This expansion seeks to strengthen TAP's position in the transatlantic market prior to privatization, consolidating Lisbon and Porto airports as gateways to Europe from the Americas. The privatization of TAP could alter the dynamics of the European airline market, especially on routes to the Americas, where competitors such as IAG and Lufthansa are also looking to expand their presence.

The sale of TAP represents a significant opportunity for major European aviation groups to expand their route network and consolidate their position in the international market. However, the Portuguese government has emphasized the importance of maintaining the airline's identity and strategic operations, ensuring that key connections for the Portuguese diaspora will not be affected by the privatization.