Portugal’s government has selected Lufthansa Group as the preferred buyer in TAP Air Portugal’s partial privatisation, ahead of Air France-KLM. The transaction remains subject to final negotiations and regulatory approvals.
The initial sale covers up to 49.9% of TAP’s capital, with 44.9% allocated to Lufthansa and up to 5% reserved for employees, leaving the Portuguese state with a majority stake. Prime Minister Luís Montenegro said Lufthansa’s financial proposal was 16% higher than the competing bid and involved less uncertainty.
The government put the first-phase proceeds at €1.201 billion. It is also considering transferring its remaining stake by 2028 in exchange for cash and shares in Lufthansa’s holding company. According to Montenegro, Lufthansa’s second-phase proposal includes an additional €488 million in cash and a share exchange that could make Portugal the group’s second-largest shareholder.
Lufthansa’s proposal preserves TAP’s brand, Portuguese headquarters and Lisbon hub, alongside island connectivity and commitments to employment stability. TAP would remain in Star Alliance and serve as the group’s platform for Brazil and other Portuguese-speaking markets. Porto would become a second base with eight long-haul aircraft.
The fleet plan envisages 117 aircraft by 2035 and 130 thereafter, including the transfer of eight Airbus A350-900s after 2030 and renewal of Portugália’s regional fleet. TAP’s Maintenance & Engineering business would join the Lufthansa Technik network, with the proposal also including €300 million of investment and 700 jobs in Santa Maria da Feira.
Other commitments include a pilot-training school at Tancos and an innovation centre in Aveiro. The government said adapting Tancos military airfield for civil use would require approximately €50 million of state funding, with Lufthansa indicating a 2029–2030 timeframe.
TAP welcomed the selection and highlighted potential future participation in the A++ North Atlantic joint venture. Air France-KLM said it was disappointed but would continue assessing opportunities to expand its presence in Portugal and South America.