TAP sale: Portugal doubles down on privatisation conditions while IAG rumoured to withdraw
March 21, 2026
Several developments emerged earlier this week in the TAP Air Portugal sale saga. The process currently involves Europe’s three large airline groups. This includes the International Airlines Group (IAG; owner of British Airways and Iberia), Lufthansa and the Air France-KLM Group.
IAG is rumoured to be looking at withdrawing from the deal. At the same time, the Portuguese government has announced it has imposed strict conditions to TAP’s privatisation.
It wants guarantees that growth will be ensured out of all of Portugal’s main airports, and not just the primary Lisbon hub. The company will have to be strengthened out of Portugal’s nine other airports, including the likes of Porto, Faro, Funchal and others in the Azores and Madeira archipelagos.
The Portuguese government is offering 44.9% of the company for privatisation, of which 5% is earmarked for employees.
IAG rumoured to withdraw from the TAP sale over concerns with a minority stake
This week, Bloomberg reported that IAG is looking at withdrawing from any such acquisition, citing sources familiar with the matter. The rumour suggests that because the Portuguese government is only looking to offer a minority stake in the company, the deal does not make much sense for IAG.
Indeed, the company’s Chief Financial Officer Nicholas Cadbury had previously said that it would want a “real clear path to ownership, full ownership or majority ownership” in TAP for make the acquisition worthwhile.
IAG does not typically opt for minority stakes, with the exception of its 20% control over Air Europa which it attempted to acquire outright but withdrew after European Union regulatory conditions made the deal commercially unviable. As it stands, the Portuguese government is awaiting non-binding offers from the three airline groups, with a deadline set for 2 April. Bloomberg reports that the carrier may well make an offer, and ultimately withdraw afterwards.
Should IAG withdraw, that would leave just two airline groups in the running: Air France-KLM and Lufthansa. The latter is currently involved in its recently-acquired ITA Airways. On Friday, the Italian carrier announced it would be adopting Lufthansa’s Miles & More loyalty programme – the latest step in its integration.
TAP’s presence in Brazil, Africa and North America are seen as exceptionally valuable to Europe’s large airline groups. IAG has by far the strongest presence in South America through Iberia’s hub in Madrid.
Portugal wants TAP to be strengthened out of all national airports
Speaking to reports at an event at Porto Airport celebrating the facility’s 80th anniversary, Prime Minister Luís Montenegro said that the use of all Portuguese airports is essential, describing it as a “cornerstone” of the privatisation process.
“There will be no privatisation [of TAP] if we do not guarantee that our airports, including naturally the Francisco Sá Carneiro airport [in Porto], will have the potential, at the level of the company’s activity, that they deserve and that are required in light of the country’s strategic interest,” he said as quoted by Diário de Notícias.
He continued: “This was very clear from the beginning, it was very clear in our decision, it was very clear in the legal instruments of this [privatisation] procedure.” Montenegro also stressed that this was a non-negotiable requirement.
Featured image: Jerry | stock.adobe.com
