Portugal must choose Air France-KLM or Lufthansa for TAP
Portugal is expected to choose before end of September between Air France-KLM and Lufthansa for a 44.9-49.9% stake in TAP, valued at approximately €1.5bn. The two bidders want fundamentally different things from the same airline.
€1 = $1.16
Portugal's government is expected to announce before the end of September which of two competing European aviation groups will acquire a minority stake in TAP Air Portugal, in a transaction valuing the airline at approximately €1.5bn and giving the winning bidder access to one of the most strategically significant route networks in European aviation.
Both Air France-KLM and Lufthansa submitted binding offers on 29 July 2026 for a stake of between 44.9 and 49.9 per cent, just below the threshold that would require the Portuguese state to cede majority control. The government retains a golden share that preserves certain veto rights regardless of the outcome, and the right to increase its holding back to a majority in future; TAP operates from Lisbon's Humberto Delgado Airport, which sits at the junction of Europe, Africa, Brazil and the United States, and serves 90 destinations with a fleet of 101 Airbus aircraft.
The two bidders want fundamentally different things: Air France-KLM wants TAP's Brazil connections, with TAP serving 15 Brazilian cities including ten served by no other European carrier nonstop. A TAP acquisition would give Air France-KLM's SkyTeam a dominant position in Europe-Brazil flying that no legacy carrier rival currently holds.
Lufthansa's thesis is different: the German group wants the Lisbon hub position and the Star Alliance reinforcement that comes with it, and an extension of the group's footprint into Iberia, a market where it currently has no direct presence. TAP has been a Star Alliance member since 2005 and operates one of the alliance's most effective connecting hubs for passengers routing between Europe, Africa and South America.
The financial backdrop is sobering: TAP reported a first-half 2026 net loss of €99.2mn, widening from €70.7mn a year earlier, as fuel costs rose 18.7 per cent in the half and 52.3 per cent in the second quarter alone. Revenue reached a record €2.04bn and passenger numbers a record 8.2 million; the commercial performance is strong, but the fuel cost environment has erased the operating improvements the EU-mandated restructuring plan was designed to secure.
The government's decision will turn on more than price: Portugal's privatisation law requires assessment of bidders on their industrial plan, labour commitments and long-term strategic vision, alongside which both groups have made commitments on maintaining Lisbon as a hub and retaining TAP's workforce. The credibility of those commitments, given each group's track record with acquired carriers, will be weighed alongside the financial terms.
The decision is expected before 30 September 2026.
