Portugal finalises privatisation of TAP, of interest to IAG, Lufthansa and Air France
The Portuguese government will approve next week the regulation with the conditions for the privatisation of the airline TAP, announced Tuesday the prime minister, António Costa, who assured that the interests of the airline will be followed. The Spanish-British group IAG – parent company of Iberia, British Airways and Vueling – Lufthansa and Air France have expressed interest in the privatisation.
The document will be approved by the Council of Ministers next week, Costa revealed during the parliamentary debate on a motion of censure of the executive presented by the far-right, which is unlikely to prosper due to the absolute socialist majority.
“TAP remains a strategic company,” said the prime minister, who guaranteed that the interests of the airline and the country would be taken into account when selling part or all of its capital.
The government has no intention of “selling it to any private party”, said Costa, who recalled that privatisation was foreseen in the restructuring plan agreed with the European Commission.
The head of government also stressed that TAP has returned to profit and that in the first half of this year it carried 7.6 million passengers, 96% of pre-pandemic figures.
TAP is owned by the Portuguese State, which currently holds 100 % of the capital after increasing its position to save it from pandemic damage, and the airline is under a restructuring plan.
TAP interests IAG in Brazilian market
The Spanish-British group IAG – parent company of Iberia, British Airways and Vueling – Lufthansa and Air France have expressed interest in the privatisation.
International Airlines Group (IAG) does not rule out other purchase operations after it closed the acquisition of 80 % of Air Europa in February, which, added to the 20 % it already had, gives it 100 % ownership of Globalia’s airline, for a sum of EUR 500 million, although this operation is at the expense of the European Commission.
The CEO of IAG, Luis Gallego, acknowledged that the group has ahead of it the digestion of the purchase of Air Europa, but, at the same time, he did not rule out other operations that could contribute to strengthening the Madrid-Barajas hub and the group itself.
And that is where the Portuguese TAP comes into the picture. The Portuguese government is finalising its privatisation due to the serious crisis suffered by the company following its nationalisation after having injected 3.2 billion euros as a result of covid.
TAP is attractive not because of Portugal, but because of its strong presence on routes with Brazil, and that is where IAG could launch a bid for the airline in its aim to control transatlantic flights. With British Airways it controls the North, Canada and the United States; with Iberia and Air Europa, all of Latin America, from Mexico to Argentina, and with TAP it would put the icing on the cake with the Brazilian market.
The operation will not be easy, and even the Portuguese government does not believe that Iberia is the ideal partner. Moreover, there will be strong competition, because the Franco-Dutch consortium Air France-KLM has also openly shown its interest in TAP, especially for routes to Brazil, and also Germany’s Lufthansa.
