Portugal Opens Negotiations With Lufthansa and Air France-KLM Over TAP

Portugal has decided not to choose between Lufthansa and Air France-KLM yet. Instead, it will give both groups several weeks to improve their offers for a 44.9% stake in TAP, the country’s fully state-owned airline.

Presidency Minister António Leitão Amaro said both proposals “justify the additional effort” after the government received Parpública’s assessment of the binding bids. He said the talks would move quickly, although he did not set a precise timetable.

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justify the additional effort

The usual next step would have been to enter final negotiations with one selected bidder. But the government judged that the offers had “such similar overall valuations, despite being different” that it would negotiate with both before making its choice. Lisbon will then select “the only competitor that allows the negotiation to be closed within a short period,” Leitão Amaro said.

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such similar overall valuations, despite being different

Lufthansa and Air France-KLM submitted their binding bids on July 29, following nonbinding proposals in April. They became the only remaining candidates after International Airlines Group, the parent company of Iberia and British Airways, withdrew.

The privatization plan, authorized by the government in July 2025, reserves up to 5% of TAP for employees. The buyer may acquire shares not taken up by workers, while the state will initially keep at least 50.1% of the capital. Price will not be the only factor. The government will also assess each group’s industrial plan and strategic commitments, including TAP’s continued use of its brand, its headquarters in Portugal, the Lisbon hub, and routes considered essential to the Portuguese economy and communities abroad. The state regained full ownership in 2021 after increasing its stake to rescue the airline from pandemic-era losses.

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