What's Happening?
Portugal's state holding company, Parpublica, announced that only three of Europe's largest airlines have expressed interest in acquiring a minority stake in the national carrier, TAP. The airlines include British Airways owner IAG, Air France-KLM, and
Germany's Lufthansa. This development falls short of the Portuguese government's expectations, which hoped for interest from major airlines outside the European Union. The privatisation process, relaunched in July, aims to sell a 44.9% stake to an airline that can enhance TAP's global competitiveness, with an additional 5% offered to TAP employees. The deadline for expressions of interest closed recently, and Parpublica will assess the interested parties based on criteria such as revenue and financial capacity.
Why It's Important?
The privatisation of TAP is significant for Portugal as it seeks to strengthen the airline's global presence and competitiveness. TAP's strategic connections to Brazil, Portuguese-speaking African countries, and the United States are considered valuable assets. The involvement of major European airlines could enhance TAP's operational capabilities and expand its market reach. However, the lack of interest from airlines outside the EU may limit the potential for broader international partnerships. The privatisation is expected to bring financial benefits, with analysts valuing TAP's stake at approximately 700 million euros, reflecting a premium over European peers due to its strategic upside.
What's Next?
Parpublica will evaluate the expressions of interest to ensure they meet the necessary criteria, including financial capacity and revenue benchmarks. Non-binding offers are expected by mid-March, followed by binding offers that will detail the price and strategic plans for TAP. The privatisation process is anticipated to conclude in the second half of 2026. The outcome will likely influence TAP's future operations and its role in the global aviation market. Stakeholders, including TAP employees and the Portuguese government, will be closely monitoring the developments.
