Air France-KLM Holds the Line on Its TAP Bid Despite Iran War and a €287 Million First-Quarter Loss — CEO Benjamin Smith Says the Lisbon-Brazil Hub Logic Has Not Changed

Air France-KLM is keeping its offer for TAP Air Portugal on the table at the same value, even after a €287 million first-quarter loss, a $2.4 billion upward revision to its 2026 fuel bill, and a Middle East war that has reset the eurozone's airline outlook in the space of a few weeks. Asked on Thursday whether the conflict between Israel and Iran would force a haircut on the TAP price, chief executive Benjamin Smith answered with two words: nesta altura, não — at this moment, no.

The Franco-Dutch group reported its Q1 2026 numbers in Paris on the morning of 30 April. The headline loss of €287 million was a marginal improvement on the €292 million the group lost in the same quarter of 2025, with revenue up 4.4% to €7.479 billion and the operating result coming in at minus €27 million. Traffic climbed 4.4%, passenger numbers rose 2.3%, and the load factor sat at 86.3% — the operational picture, in other words, remained healthy until the Iran shock landed.

Fuel and Capacity Take the Hit

The bigger story is the forward guidance. Air France-KLM raised its 2026 fuel-cost estimate to $9.3 billion, $2.4 billion above the previous outlook, after Brent crude rallied on the back of the Israel-Iran exchange. Capacity growth for 2026 was trimmed to 2-4% from a previous 3-5% range, and the investment programme was cut to under €3 billion. Q1 fuel costs had actually fallen 15% before the war began — a reminder of how quickly the macro picture has shifted.

The TAP Logic, Restated

Smith repeated the strategic argument that has framed Air France-KLM's interest in TAP since the privatisation process opened: Lisbon, Smith argues, is a uniquely positioned southern-European hub for connections to the Americas and to Brazil in particular, and TAP's Star Alliance feed combined with the group's SkyTeam network would create something neither carrier has alone. Lufthansa, the third bidder alongside IAG, has made the opposite case — that TAP fits more naturally inside a single-alliance northern-European hub structure.

Pinto Luz's ministry has not yet confirmed a final decision date, and the binding-offer phase is still expected to land in the second half of 2026. The government holds 100% of TAP after the residual private stakes were repurchased last year, and is selling 49.9% with a strategic-partner mandate.

What This Means for Expats

• Route stability: Whichever bidder wins, all three have publicly committed to keeping Lisbon as a hub — meaning the dense long-haul Brazil, Angola, Mozambique, and US east-coast network is unlikely to thin out in the short term.
• Frequent-flyer alignment: Air France-KLM and Lufthansa would each pull TAP into their respective alliance — Star (Lufthansa) or SkyTeam (Air France-KLM/Delta). That changes which Miles&Smiles or Flying Blue programmes actually accumulate value on a Lisbon-based itinerary.
• Fares to watch: A war-driven fuel premium will work through ticket prices over the summer regardless of who buys TAP. Booking long-haul early in the cycle is the cheaper play.
• Timeline: A binding decision is expected in H2 2026; ownership transfer would not complete before 2027.

For Lisbon's expat community — which now skews heavily towards Brazil, the United States, and France — the outcome of the TAP auction is more than an aviation file. It will set the cost and convenience of the connections that bind Portugal to the diasporas it depends on.

See also: Pedro Dominguinhos's warning that Iran-war supply-chain disruption is already hitting PRR delivery.