Portugal invites Lufthansa and Air France-KLM into final talks for 44.9% TAP stake

Government opens additional negotiation phase

The Portuguese government decided on 4 September 2026 to open an additional negotiation round with both Air France-KLM and Deutsche Lufthansa AG for the privatization of national carrier TAP. Following a cabinet meeting, Presidency Minister António Leitão Amaro stated that the technical evaluation report submitted by state holding company Parpública on 1 September 2026 found the two binding offers to be globally very close. Instead of selecting a single preferred bidder immediately, ministers established a bilateral negotiation window expected to last several weeks to allow both airline groups to improve their bids. Leitão Amaro explained the decision to reporters after the cabinet session:

The normal course at this stage would be to proceed directly to final negotiations with a selected competitor. It happens that, and this is good, while the binding proposals differ and their contents differ, the proposals have an overall assessment that is so close that we chose to create a final negotiation period of a few weeks with both groups so that they can, as we hope, improve the proposals submitted.

Strategic proposals and carrier interests

Both bidding groups confirmed their intention to continue in the privatization process after the cabinet announcement. Lufthansa, which submitted its binding offer on 29 July 2026 alongside Air France-KLM, seeks to expand operations into Latin America, with a particular focus on transatlantic routes connecting to Brazil. The German carrier stated that it aims to strengthen Lisbon as a hub while preserving TAP's national identity. Air France-KLM presented a plan covering passenger transport, cargo operations, loyalty programs, and Maintenance, Repair and Overhaul (MRO) activities. Its transatlantic joint-venture partner, Delta Air Lines, supports the proposal.

The group's continued participation in this phase reflects its unchanged interest in TAP, and we look forward with anticipation to the next phase of the process.

We welcome that the Portuguese government is entering into a deepened dialogue with the Lufthansa Group regarding our offer submitted at the end of July.

Sale structure and market valuation

The Portuguese state is selling an equity stake of up to 49.9% in the flag carrier, which was restarted as a privatization process in July 2025. The transaction structure allocates a 44.9% stake to the winning strategic partner, while a 5% tranche is reserved for TAP employees. Any portion of the employee tranche not subscribed by workers can be acquired by the winning investor under a right of first refusal. Neither the government nor the bidders disclosed the exact financial terms of the bids. Analysts at Bernstein estimated the 44.9% equity stake to be worth approximately €700 million, based on an enterprise valuation of €1.5 billion for the entire airline.

Financial conditions and next steps

The tender proceeds under European Union state aid rules that prohibit Portugal from injecting additional public funds into the carrier. TAP posted a net loss of €99.2 million for the first half of 2026, which the government and company management attributed to higher jet fuel prices and international operating pressures. Leitão Amaro noted that passenger sales reached high levels despite the financial loss, adding that the cabinet made no decision regarding the composition of TAP's board of directors. Following the bilateral negotiation period over the coming weeks, the government will select a single bidder for final talks to complete the transaction.