Portugal relaunches TAP privatisation with initial sale of 49.9% stake

Lisbon: The Portuguese government has relaunched the long-awaited privatisation of TAP Air Portugal, announcing the sale of an initial 49.9% stake in the national airline. Of this, 5% will be set aside for TAP employees.

Prime Minister Luis Montenegro highlighted that the move is aimed at ensuring the airline’s financial sustainability while maintaining Portugal’s strategic interests.

The partial privatisation has already caught the attention of three major European airline groups: Lufthansa, Air France-KLM, and IAG, the parent company of Iberia and British Airways.

All three have held discussions with the government and signalled their willingness to evaluate the terms of the sale once the official tender documents are released.

Montenegro emphasized that preserving TAP’s Lisbon hub is crucial, especially for maintaining key transatlantic routes to Brazil, Portuguese-speaking African countries, and the United States. The government also sees TAP as essential to sustaining Portugal’s booming tourism sector.

TAP had been transferred to the private sector in 2015, when a consortium formed by a Portuguese businessman and David Neeleman, founder of JetBlue, Azul and Breeze, purchased 61% of its shares.

However, the Portuguese government decided to renationalize the airline years later. TAP then received financial resources from the European Union to overcome the crisis caused by the Covid-19 pandemic, which led to a record €1.6 billion loss in 2021.

The government injected €3.2 billion into TAP as part of a rescue and restructuring effort, but now seeks to reduce public spending on the airline.

TAP currently carries over 16 million passengers annually with a mainline fleet of 99 aircraft, plus 19 additional planes operated by TAP Express on regional routes.

This first stage of privatisation allows the government to retain control, while keeping open the possibility of future sales.

Montenegro also made it clear that if none of the bids meet Portugal’s strategic requirements, the process could be suspended without penalties.