Air France-KLM Group opens the race for minority stake in TAP Air Portugal

In an attempt to change the landscape of European aviation, the Air France-KLM Group has become the first airline group to formally express an intent to bid for a minority stake in TAP Air Portugal (TAP). With at least two other groups also expected to bid, the race is on to see which will succeed in consolidating the European airline market.

On September 25, 2025, the Franco-Dutch airline group announced it would submit an “expression of interest” for the 44.99% stake in TAP. The move comes after Portugal’s leader, President Marcelo Rebelo de Sousa, approved a government decree in August 2025 that cleared the way for the long-awaited privatization of the country’s national airline.

The Portuguese government is privatizing TAP to recover €3.2 billion in state aid it provided to the carrier to keep it afloat during the COVID-19 crisis. The process is expected to be concluded by early 2026.

SvedOliver / ShutterstockThrough the proposed privatization process, the government is aiming to sell a non-controlling stake of 49.9% in the carrier.  This will be broken into two constituent parts, with a 44.9% stake (estimated to be valued at approximately $817.7 million) being divested to one or more major investors, and the remaining 5% stake being allocated to TAP employees.

The expression of interest from Air France-KLM Group coming in first puts the consortium in the driving seat, at least for now. The German Lufthansa Group, as well as International Airlines Group, owner of British Airways, Iberia, and Aer Lingus, is also widely expected to bid. All offers have to be submitted by 16:59 on November 22, 2025, to be considered further in the bidding process.

In a brief response sent to the Portuguese authorities handling the sale process, the Franco-Dutch company stated that it “took note of the publication of the Terms of Reference and the consequent official start of the privatisation process of TAP Air Portugal. “We are carefully analysing the conditions defined by the Government and intend to submit our expression of interest within the indicated deadline,” it added.

M101Studio / ShutterstockTAP Air Portugal would potentially be of key strategic value to the Air France-KLM Group. The carrier’s hub at Lisbon-Humberto Delgado Airport (LIS) would provide the group not only a network hub in Southwest Europe, but also additional connection options for passengers in TAP’s stronghold markets, principally from Portugal to Brazil, Portuguese-speaking African nations, and the various markets in the US. The addition of these routes could strengthen an enlarged Air France-KLM Group in markets where there is currently a smaller presence.

Additionally, should Air France-KLM come out of the contest as the successful bidder, such a result would likely mean that TAP would switch its global alliance membership from Star Alliance to SkyTeam, of which Air France-KLM is a founding member. TAP’s shift from Star Alliance to SkyTeam could reshape the relative balance between airline partnerships, boosting SkyTeam’s coverage and exposure in markets across South America and Africa.

Long-term interest in TAP

Air France-KLM had first expressed an interest in TAP in early 2025. In January, during French President Emmanuel Macron’s visit to Portugal, CEO Ben Smith signalled interest, emphasizing sustainable aviation fuel partnerships.

Then, in March 2025, when questioned on the matter, Smith announced that the Group would guarantee to preserve the TAP brand, its fleet and employees, and continue to build on the carrier’s Lisbon hub. These pledges coincide with the Portuguese government’s preconditions for the sale, which include prioritizing maintaining TAP’s identity and the airline’s economic contributions.

The move would also align with Air France-KLM’s broader growth plans going forward, which include a 10% annual increase in capacity.

European consolidation on the cards

Should any of the three airline groups that have expressed an interest in the carrier supply the winning bid, then the result is likely to consolidate the European airline market further.

Lufthansa Group remains a strong contender, having been active in hoovering up stakes in several other European carriers in recent years. Brussels Airlines,  Austrian, SWISS International, and most recently ITA Airways all now fall under the Lufthansa Group banner, with the Group reportedly having held preliminary talks with the Portuguese government about a possible stake in TAP earlier in 2025.

kamilpetran / ShutterstockMeanwhile, the IAG group is also in the process of evaluating the privatization of TAP. The latter welcomed the progress in the privatisation of TAP when the Portuguese Government published the full terms of the sale on September 23, 2025. A spokesperson on behalf of IAG said that it was “carefully analyzing the details.”

Any successful bid is also likely to come under scrutiny from the European Commission on competition grounds, just as was the Lufthansa Group with its takeover of ITA Airways. Indeed, the whole process could be delayed beyond the targeted completion date of early 2026 by any request for further information being filed by any party, any involvement from the European competition authorities over any sale, and any further prevarication or unforeseen events during the whole process.

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Air France-KLM Group opens the race for minority stake in TAP Air Portugal

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