Government talks with Lufthansa and Air France-KLM over TAP to last three weeks

Portugal is giving Lufthansa and Air France-KLM three weeks to improve their competing bids for a 44.9% stake in TAP, rather than selecting one bidder immediately.

The decision followed a government assessment that the two binding offers had “such similar overall valuations, despite being different.” The Council of Ministers instructed state company Parpública to invite both groups into final negotiations. The government will then choose “the only competitor that allows the negotiation to be concluded within a short period,” Presidency Minister António Leitão Amaro said.

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What would normally happen at this stage, as is customary, would be to move straight to final negotiations with a selected bidder.

The government also extended the partial reprivatization process until December 31. Air France-KLM and Lufthansa submitted their binding offers on July 29, after presenting non-binding proposals on April 2. They became the only remaining candidates after International Airlines Group, the parent company of Iberia and British Airways, withdrew.

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Such similar overall valuations, despite being different

The plan, authorized in July 2025, covers the sale of 44.9% of TAP to a strategic investor and reserves up to a further 5% for employees. The buyer may acquire shares that workers do not subscribe to, while the Portuguese state will initially retain at least 50.1% of the company.

Price will not be the only consideration. The government will also examine each bidder’s industrial plan and strategic commitments, including keeping the TAP brand, its headquarters in Portugal, Lisbon’s hub and routes considered essential to the Portuguese economy and communities abroad. TAP is currently wholly state-owned after Portugal restored full control in 2021 to rescue the airline from pandemic-era losses.

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The only competitor that allows the negotiation to be concluded within a short period