TAP Air Portugal sale: Who will buy the airline?
October 31, 2025
Europe’s three major airline groups are in the running to buy Portugal’s flag carrier, TAP. The airline is of particular interest given its lucrative South America network.
The Portuguese government wants to privatise the carrier. And it is justified in doing so. Although TAP has been net profitable for the last three years, its rhetoric has been consistent: a competitive European market has left it in a vulnerable position.
At the start of this month, at the World Aviation Festival in Lisbon, CEO Luis Rodrigues said: “The time of being proudly alone is gone, there was a time when it was possible, but not anymore, and I’d be happy to be integrated into a larger group.”
TAP’s added value
TAP Air Portugal is valuable for a few reasons. The first is its presence at Lisbon’s overcrowded and slot-constrained Humberto Delgado Airport. Although not one of Europe’s main hubs (relative to the likes of London Heathrow or Paris Charles de Gaulle), it is an important market. TAP’s Lisbon dominance gives it an advantage for high-yielding business and tourism traffic to and from Portugal’s capital.
Its second unique selling point is its long-haul network to Brazil, broader South America, and lusophone Africa. It competes with very few European airlines on these sectors and has made Lisbon a primary transit point for flights to these destinations.
Its mixed long-haul fleet of Airbus A321neos, A330neos and Airbus A330ceos has enabled measured expansion. It has right-sized its operation to otherwise overlooked destinations for long-haul flights. For instance, it is the only European airline to operate to Brasilia, Belem and Natal.
Who wants to buy TAP?
All three of Europe’s major airlines are interested in TAP. Lufthansa Group, the International Airlines Group (IAG) and Air France-KLM are all in the running to take a minority stake. Portugal is selling 49.9% of the company, therefore maintaining majority control with 50.1%. 5% will go to employees, meaning it is offering up to 44.9%.
TAP’s value is of particular interest to all three, for different reasons. IAG already owns Iberia, headquartered in nearby Madrid. It already offers an extensive network to Latin America using its A350s, A330s and A321XLRs. With a stake in TAP, it could leverage its expertise to grow the carrier and further its control over the Europe-South Atlantic market.
For Air France-KLM and Lufthansa, the situation is a bit different. TAP’s lucrative Brazil network allows the two to gain a foothold in the market, long controlled by Iberia. As the North Atlantic showed signs of vulnerability over the last couple of years, the need for a strong and diversified long-haul operation is evident.
Both groups are also quite strong in Africa, more so than IAG through its subsidiary British Airways. With the addition of TAP’s network to places like Angola and Mozambique, that dominance would be furthered. With access over Russian airspace hindering the appeal of core markets in Asia-Pacific and weakening (but slowly returning) demand to the United States, TAP is well-positioned.
The status of the TAP Air Portugal sale
While many consider IAG to be the frontrunner given its expertise in TAP’s core markets and its financial success, it typically does not get out of bed for less than 100% control.
It owns Aer Lingus, British Airways and Iberia entirely. It pulled out of the intended deal to acquire Spain’s Air Europa after the European Commission’s anti-competition concessions proved too hefty to make viable. Since then, IAG has confirmed that it will maintain its stake as a financial investment rather than a strategic one.
As for Lufthansa, it is keen to acquire airlines at any stake, so long as there is added value. Most recently, it announced it would purchase 10% of airBaltic, a key codeshare and wet-lease partner. It is also in the process of purchasing 100% of Italy’s ITA Airways.
Air France-KLM is in a similar position. Its most recent deal, for 20% of SAS increasing to 61% as of the second quarter of 2026, is a testament to its growth ambitions in the European market.
In July, the government said it hopes to close the sale by “within the next year.”
Featured image: Markus Mainka | Adobe Stock
