Portuguese president approves privatization of TAP Air Portugal

Portuguese President Marcelo Rebelo de Sousa has approved a government decree, which has been signed into law, that clears the way for the long-awaited partial privatization of the country’s national airline, Tap Air Portugal (TAP). Through 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 being divested to one or more major investors, with the remaining 5% stake being allocated to TAP employees.

Under the terms, interested investors have 60 days to complete the prequalification process, followed by 90 days to submit non-binding offers for the 44.9% share in the airline. Three major European aviation groups have already expressed an interest in the offering, which includes Lufthansa Group, Air France-KLM, and International Airlines Group (IAG). The primary purpose of the sale is for the Portuguese government to recoup approximately €3.2 billion ($3.7 billion) that it invested in the carrier to support it financially during the COVID-19 pandemic.

This latest move represents a significant change in direction by the Portuguese government over the sale. Back in October 2023, President de Sousa vetoed the proposed sale of at least 51% of TAP. Citing concerns over the transparency of the privatization process, how the government would maintain oversight of a company of such national importance, the process stagnated. However, a seismic change in policy came in May 2025 when national elections were held. After those elections, the incoming administration vowed to complete the privatization process, which would see the government ultimately retain a controlling 51% stake in the airline.

SvedOliver / ShutterstockOnce the process is underway, the Portuguese government has set out the criteria by which it will evaluate the contending bids. The selected partner must maintain the TAP brand, while also developing the airline, its route structure, and its fleet to continue linking Portugal to key destinations, including those in Portuguese-speaking countries. Developing the airline’s main hub at Humberto Delgado Airport in Lisbon (LIS) as well as the airline’s secondary bases at Porto (OPO) and Faro (FAO are also said to be key elements.

About the likely bidders

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. Germany’s 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.

The other leading contenders include IAG, which controls British Airways, Iberia, and Aer Lingus, while the Air France-KLM Group has also publicly stated an interest should a stake in TAP come up for sale. According to Reuters, Air France-KLM reiterated its interest recently, saying in a statement it “will fully participate in this process once all details are released”.

However, IAG has been more reserved with stating its intentions in the public domain, stating, “As we have previously stated, IAG looks forward to reviewing the terms of the potential sale of TAP and will carefully consider all details and conditions of the process as soon as they are made available”.

John Gress Media Inc / ShutterstockMore about TAP

TAP is currently enjoying one of the strongest trading periods in its history, with passenger loads and profitability both up, while the carrier is actively expanding its route network, particularly to long-haul destinations such as those in North and South America. In 2024, the airline recorded a net income of €53.7 million ($58.4m), returning a positive result for the third consecutive year. Compared to 2019, the last year before the pandemic, the results register an increase of €149.4 million ($164.3m).

Additionally, in 2024, TAP’s operating revenues totaled a new all-time high of €4,242.4 million ($4,666.6m), an increase of 0.7% compared to 2023 and 28.6% above 2019 levels. Flown passengers’ revenue also remained positive in 2024, driven by the increase in overall network capacity of 1.6% and a corresponding improvement in the airline’s load factor of 1.5%.During 2024, TAP carried a total of 16.1 million passengers, an increase of 1.6% compared to 2023, reaching 94% of the values achieved in 2019. The total number of flights operated decreased by 1.5% compared to 2023, reaching 86% of pre-crisis levels. The company expects to improve on this during 2025.

Markus Mainka / ShutterstockAccording to ch-aviation, the airline currently operates an all-Airbus fleet of 83 aircraft in its mainline fleet while its regional subsidiary, TAP Express, operates a further 19 Embraer regional jets. The mainline carrier operates 105 routes to 88 destinations across 31 countries from its main base at Lisbon’s Humberto Delgado Airport (LIS). The airline’s main strengths lie in its extensive network to several points in Brazil, Portuguese-speaking African countries, and the United States from its Lisbon hub.

Next steps

With the Portuguese president having now approved the sale of TAP, the privatization process can now formally proceed at pace, with a targeted completion date of mid-2026 for the winning bidder to be revealed. The sale process is set to consist of four major stages.

In the first stage, known as ‘Pre-qualification’, all interested parties have 60 days to lodge a formal intention to proceed with purchasing a stake in TAP and qualify themselves for the second stage, whereby full proposal submissions are to be filed. This is likely to take place in 4Q24, with the emphasis being on how the bidder will engage with the aims of the Portuguese government for the future of TAP.

The third stage will see binding offers being submitted to the Portuguese government following a process of ‘due diligence’ on each of the submitted bids, with final negotiations with any party left in the process after that.

However, the whole process could be delayed further 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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