Aviation

Two Down, One to Go: Lufthansa Joins Air France-KLM in TAP Bidding Race as IAG Decision Hangs in the Balance

The race for TAP Air Portugal narrowed to its final shape on Thursday as both Air France-KLM and Lufthansa confirmed they had submitted non-binding offers for a minority stake in Portugal's flag carrier before the deadline expired. The IAG group, parent of Iberia and British Airways, has yet to confirm whether it entered the process, leaving open the question of whether Lisbon will have two or three suitors to choose from.

The developments mark the most concrete step yet in a privatization saga that has dragged on for years, through pandemic bailouts, political reversals, and union resistance. For expats and residents who depend on TAP's extensive route network connecting Portugal to the world, the identity of the eventual buyer will matter far beyond the financial pages.

Air France-KLM: Lisbon as the Southern European Hub

Air France-KLM was first out of the gate, issuing a detailed communiqué that laid out its strategic vision for TAP within the group's multi-hub model. The pitch was unambiguous: under Air France-KLM ownership, Lisbon would become the group's sole hub in southern Europe, capitalizing on its geographic position to serve routes to the Americas, particularly Brazil, and to Africa.

The Franco-Dutch group emphasized that TAP would retain its Portuguese brand identity while benefiting from integration into a commercial network that includes Air France, KLM, Transavia, and close partnerships with Delta Air Lines and Virgin Atlantic through their transatlantic joint venture. The group also stressed its experience working with state shareholders, a pointed reference to the Portuguese government's intention to retain a majority stake.

The approach mirrors what Air France-KLM has done with its existing brands: KLM has operated under the Air France-KLM umbrella since 2004 while maintaining its Dutch identity and Amsterdam hub. The implicit promise is that TAP would receive the same treatment.

Lufthansa: The Quiet Contender

Lufthansa's confirmation came later in the day and was notably terse. The German airline group said only that it had "submitted a non-binding offer for TAP Air Portugal," declining further comment. The brevity contrasts with Air France-KLM's expansive vision document, but Lufthansa's interest is far from casual.

The German group has been on an acquisition spree in recent years, absorbing ITA Airways in Italy and expanding its portfolio of European carriers. Adding TAP would give Lufthansa a foothold in the Iberian Peninsula and access to the lucrative Portugal-Brazil corridor, a market where TAP holds significant strength. Lufthansa's Star Alliance membership, which TAP already belongs to, could simplify integration compared to a move into the SkyTeam or Oneworld ecosystems.

The IAG Question

The conspicuous absence as of Thursday evening was IAG, the parent company of Iberia, British Airways, and Vueling. Bloomberg reported earlier in the week that IAG might not submit a bid, but the group responded only by noting that it had until the end of the day to decide. If IAG stays out, the privatization becomes a straight contest between the two largest airline groups in continental Europe.

An IAG bid would carry its own complications. Iberia already dominates the Iberian market, and competition regulators would likely scrutinize any attempt to absorb TAP into a group that already controls much of Spain's aviation infrastructure. For passengers flying between Portugal and Spain, or connecting through Madrid, the implications for competition and pricing could be significant.

What It Means for Passengers and Residents

For the millions of expats, immigrants, and Portuguese diaspora members who rely on TAP's route network, the privatization outcome will directly affect connectivity, pricing, and service quality. TAP currently operates one of the most extensive networks linking Europe to the Portuguese-speaking world, with particular strength on routes to Brazil, Angola, Mozambique, and Cape Verde.

The government has set conditions requiring the buyer to maintain the Lisbon hub and preserve connectivity, but the practical impact will depend on which group's network TAP is folded into. An Air France-KLM deal would move TAP into the SkyTeam alliance. Lufthansa ownership would keep TAP in Star Alliance. An IAG bid, if it materializes, would shift TAP to Oneworld. Each scenario reshuffles frequent flyer programs, codeshare agreements, and connecting options.

The non-binding offers are only the first step. The Parpública, Portugal's state holding company managing the sale, will evaluate the proposals before inviting selected bidders to conduct due diligence and submit binding offers. The government has indicated it expects to conclude the process by the end of 2026.

Markets, Business & Tech Briefing: PSI Sinks 1.8%, BCP Slides, Galp Bucks the Trend

Portugal's New-Build Construction Costs Climbed 6.9% in the Year to May, Led by Labour Rather Than Materials

Sonae Sierra Buys Nine Mercadona Supermarkets in Spain for Its €600 Million Food-Retail Fund

Air France-KLM: Lisbon as the Southern European Hub

Lufthansa: The Quiet Contender

The IAG Question

What It Means for Passengers and Residents

Read next