- Lufthansa, IAG, and Air France KLM are preparing to bid for a controlling stake in Portuguese airline TAP, pending the Portuguese government's clarification on valuation and stake retention.
- The interested airlines view the potential acquisition of TAP as a strategic opportunity to expand market share, especially in Latin America, and to scale operations.
- While each contender offers unique benefits, they all have a keen interest in TAP's lucrative routes to Brazil, the United States, and Africa, subject to the Portuguese government's conditions for maintaining the brand and hub.
European Airline Giants Poised to Bid for Controlling Stake in TAP Airlines
LISBON — Three major European aviation players—Lufthansa, IAG, and Air France KLM—are gearing up for a potential September bid to acquire a dominant stake in TAP Airlines. This anticipated move follows pending clarifications from the Portuguese government regarding the airline's valuation, the starting price, and the extent of government ownership that will be maintained in the carrier, Portugal Resident reports.
With the acquisition, each airline group stands to benefit differently. Lufthansa, a conglomerate that includes Austrian Airlines, Brussels Airlines, Eurowings, and Swiss, is already a market heavyweight. Last year it transported more than 100 million passengers and, if successful in acquiring TAP, could add nearly 17 million more based on 2019 figures. On the other hand, IAG, which encompasses British Airways, Iberia, Aer Lingus, and Vueling, could usurp Lufthansa as Europe's largest airline group, with 108.5 million passengers based on 2022 data.
According to ECO's online news service, the interested parties view the potential deal as not just a market consolidation move but also an opportunity to extend reach, particularly in Latin America, while broadening their network of destinations. Of the contenders, Air France-KLM is the one with the most potential for growth. If the group acquires TAP, its annual passenger figures could grow by 16.5%, reaching nearly 52 million when combined with TAP's current annual numbers.
KLM has already engaged legal, financial, and communications firms to assist in crafting its bid, following the Portuguese government's reacquisition of TAP in 2021. For these European airline behemoths, the allure isn't just in scaling operations but also in gaining access to TAP’s high-yield routes to Brazil, the United States, and Africa.
However, the Portuguese government has signaled that any deal would come with stipulations. It insists on the preservation of the TAP brand, the maintenance of Lisbon as a hub airport, and the retention of several existing routes.
