With just two days to go before interested parties must submit their bids to acquire a significant minority stake in the Portuguese state-owned flag carrier TAP Air Portugal, Lufthansa has publicly come out as a potential suitor for the Lisbon-based airline.
On Thursday, the German airline group said it had formally notified TAP Air’s government-owned holding company that it wanted to take part in the bidding process to acquire up to 44.9% in the airline.
The news that Lufthansa plans to acquire a stake in TAP Air Portugal should not come as a surprise to anyone, although chief executive Carsten Spohr had previously been interested in a far lower equity stake than Portugal’s government would ideally like to sell.
TAP Air Portugal is currently 100% owned by the Portuguese government after it required a massive bailout when it was rocked by financial difficulties at the start of the COVID-19 pandemic.
Lawmakers had hoped to partly privatize the airline in 2023, but a government scandal that engulfed the airline scuppered those plans.
Spohr reportedly flew to Lisbon last September to discuss a plan to acquire a 19% stake in TAP Air Portugal, although those talks don’t appear to have amounted to anything.
In September, TAP’s holding company, Parpublica, said it would start taking bids for the airline through a competitive process. Parties have until November 22nd to submit their interest in bidding for a stake of up to 44.9% in TAP Air Portugal.
While Lufthansa has now publicly announced its interest, other frontrunners include the Air France-KLM Group. There is also the possibility that the IAG Group in neighboring Spain will want to take part in the bidding process.
All three airline groups will be interested in TAP Air Portugal to strengthen their presence in Latin and South American markets, although this is probably less of a concern for IAG, which has been building its Madrid hub through Iberia.
IAG is, however, slightly on the back foot when it comes to recent European airline consolidation.
Its attempt to acquire Air Europa ran into difficulties because of competition concerns, while Lufthansa recently snapped up a stake in Italy’s ITA Airways, and the Air France-KLM Group managed to snag a stake in SAS.
