Lufthansa wins 44.9% TAP stake in €1.2 billion deal

Portugal's government picked Lufthansa on Wednesday, October 14, to buy a 44.9% stake in TAP Air Portugal. Officials valued the deal at 1.2 billion euros ($1.3 billion). The German group beat Air France-KLM, the only other bidder, and becomes the strategic partner of one of Europe's last independent flag carriers.reuters+1

The deal still needs approval from European Union regulators. Prime Minister Luís Montenegro said the government may complete TAP's full privatization by 2028. The state remains the main shareholder, and 5% of the company is set aside for TAP's more than 9,000 employees to buy.apnews+1

Why Lufthansa won

The cabinet made the decision after both airlines submitted improved final bids in late September. Montenegro said Lufthansa's offer was "16% higher than the rival proposal and carries a lower degree of uncertainty". Portuguese broadcaster SIC had reported that Lufthansa offered to pay entirely in cash, while Air France-KLM's bid mixed cash with its own shares. Air France-KLM's final offer covered a stake of up to 49.9%.bloomberg+2

The government had said it would judge the bids on each airline's industrial plan as well as on price. It wants TAP's partner to expand service beyond the Lisbon hub to Porto, Faro, the Azores and Madeira. Lufthansa already operates 353 weekly flights to and from Portugal and is building a Lufthansa Technik maintenance facility near Porto. The sale and transfer of shares are expected to take place in 2027, according to ECO News.nltimes+1

The prize: Brazil and the Lisbon hub

TAP's main draw is its landing slots linking Lisbon with Brazil, Portuguese-speaking Africa and the United States. Aviation Week data put TAP's share of Europe–Brazil capacity at 25.6%. As of June, the airline flew 101 aircraft to 93 destinations. It carried a record 8.2 million passengers in the first half of 2026, up 4.2% from a year earlier. TAP posted a net profit of 4.1 million euros last year.reuters+2

TAP will join a Lufthansa group that already includes ITA Airways and SWISS. Analysts say high jet fuel prices tied to the war in Iran could speed up consolidation among Europe's airlines. TAP chief executive Luís Rodrigues said before the announcement that joining a larger group would let the carrier "access a larger pool of resources at better value".rte+1

A third attempt

This sale follows a state rescue. The European Commission approved 3.2 billion euros in restructuring aid for TAP in 2021, after a 1.2 billion euro rescue loan in 2020. Earlier attempts to privatize the airline, in 1998 and 2015, failed, and each time the company returned to state ownership.apnews+1