BNR – Portugal’s Finance Minister Fernando Medina declared an intention to sell a minimum of 51% of the state-owned airline TAP. The move is necessary to boost the national aviation sector, according to the minister.
Medina emphasised that potential buyers must be established industry players with significant scale. Indeed, this requirement has intrigued many of Europe’s aviation giants.
Lufthansa, Air France-KLM, British Airways, and Iberia’s parent company, IAG, have all expressed keen interest in participating in the privatisation.
Strategic Routes Spark Interest
A spokesperson from the Franco-Dutch airline holding stated the group’s “strong interest” and eagerly awaits further details.
IAG’s CEO, Luis Gallego, remarked optimistically during the World Aviation Festival in Lisbon.
He stated, “We’ll have to study the process carefully, but we feel optimistic and believe that TAP can become another success story within IAG.”
Lufthansa sees a promising opportunity in TAP’s extensive network of routes to and from South America. The aviation market is steadily expanding in that region.
According to market insights, revenue in South America’s flight market is expected to reach nearly €23 billion this year. Furthermore, figures project a growth to €26.8 billion by 2027.
Portugal’s Finance Minister highlighted the value of TAP’s “privileged connections” to Portuguese-speaking countries, particularly Brazil, South America’s largest country.
TAP: Privatisation Journey
TAP’s historical transitions between public and private ownership have culminated in the government holding 72.5% of its capital after a 2020 nationalisation.
The airline is undergoing restructuring under a Brussels-approved bailout. It rebounded from a four-year loss streak with a €65.6 million profit last year, with positive results anticipated this year.
The precise stake to remain in state hands remains undecided. However, the government aims to finalise the full privatisation process, including terms and conditions, by year-end.
The comprehensive privatisation process is set to conclude by mid-2024, marking a significant chapter in TAP’s journey towards private ownership.