Lufthansa beats Air France-KLM to €1.2bn stake in TAP Air Portugal

The Portuguese government announced after Wednesday's cabinet meeting that German carrier Lufthansa had been chosen to buy a 44.9% stake in TAP as part of the Portuguese airline’s privatisation.

"The government is successfully bringing to a close the first phase of the privatisation of our national airline. A process conducted with strict respect for competition, a stringent approach to negotiations and complete transparency vis-à-vis the Portuguese public," Portuguese prime minister Luís Montenegro said.

The prime minister then announced that, after assessing the bids, the government had opted for the Lufthansa Group, "whose financial offer is 16% higher than the rival proposal and carries a lower degree of uncertainty."

The transaction will bring in "€1.201 billion in this first phase" and the state will retain a majority stake of 50.1% in the company. "Lufthansa will be responsible for executive and operational management," he said.

"This is an offer that gives the airline a total valuation of €2.552 billion. A figure far above the independent valuations put forward a few years ago or even just a few months ago," he added.

Montenegro also stressed the "ambitious strategy" in the aviation sector, particularly when it comes to airport infrastructure.

As a result, "we are ensuring the growth of TAP, the growth of the fleet, the growth in passenger numbers, the growth in destinations and routes, and also the growth in investment, not only in TAP but across the entire aeronautics sector in Portugal," he said.

The proposal will support further investments, including €500 million to set up a new pilot training school in Tancos, an innovation centre in Aveiro and a corporate services centre, in addition to the already announced investment by Lufthansa Technik in Santa Maria da Feira.

Montenegro also pointed to plans to create jobs. "We are envisaging 3,000 associated jobs linked to TAP's projected growth and a total of 5,500 direct and indirect jobs across all these investment initiatives in our country."

Miguel Pinto Luz, minister for infrastructure and housing, set out the offer in detail, highlighting plans to expand the fleet to 117 aircraft by 2035 and 130 after 2035. Up to eight Airbus A350-900s are also due to be transferred to TAP from 2030 onwards.

The proposal also includes investment in Francisco Sá Carneiro Airport, the strategic base for the entire operation, as well as in Faro Airport and the airports in Portugal’s autonomous regions.

At the end of September, Air France-KLM and Lufthansa submitted their respective final bids to acquire 44.9% of the Portuguese airline's share capital, according to Parpública, the company that manages state holdings.

A further 5% of the company’s shares are reserved for employees. However, under the decree-law on TAP's privatisation, published in August and cited by Lusa, the chosen private investor — in this case Lufthansa — may also buy any shares not bought by employees. The state will retain the remaining 50.1%.

According to Portugal's business press, TAP posted a loss of €99.2 million in the first half of 2026, 40% higher than a year earlier.

The finance minister, Joaquim Miranda Sarmento, said last week that the privatisation process would only be concluded in 18 to 24 months, in 2028, after approval from the European Commission.