Lufthansa aims for stake in Portuguese airline TAP

Lufthansa’s big boss, Carsten Spohr, met yesterday with members of the Portuguese government about a possible stake by the German airline group in TAP. According to Italian business newspaper Corriere della Sera, Lufthansa is interested in taking a 19.9% stake in the publicly owned Portuguese airline.

Lufthansa, Air France-KLM, and British Airways parent company IAG are all interested in TAP, an airline that the center-right Portuguese government wants to privatize. According to Reuters, Lufthansa believes the government could favor Lufthansa as a buyer because the company would retain TAP’s autonomy.

Gateway to Brazil

The Portuguese airline company is particularly interesting because of its connections to Brazil and strong presence in Africa. The Lisbon hub is the main gateway to Brazil, and TAP largely dominates this traffic, with 11 cities served from Lisbon and Porto.

Lufthansa took a minority stake in the Italian airline ITA recently in May. With a 19.9% stake, Lufthansa remains below the 20% that requires approval from the European Commission, the EU antitrust regulator. A formal offer for a stake in the airline is expected to be made in the first quarter of 2025 and could be worth around 180 to 200 million euros.

The previous center-left government approved the sale of at least 51% of TAP in September 2023, but it never found the time to implement the plan before the general election earlier this year.

Half-year revenue of €0.4 million

TAP currently has around 7,500 employees and a fleet of 99 aircraft, with 68% of the medium- and long-haul operational fleet consisting of NEO Family aircraft.

The airline carried 7.7 million passengers in the year’s first six months. With a profit of 72.2 million in the second quarter of 2024, TAP closes the first six months of the year with a profit of 0.4 million euros.

TAP has consistently changed between private and public ownership throughout its existence. It was renationalized in 2016 after the government bought 50% of the company from the Atlantic Gateway. The company was fully renationalized in 2020, with an injection of 3.2 billion euros and a major restructuring plan.

According to AirHelp, TAP and EasyJet were the Portuguese airlines that performed the worst in punctuality last year. TAP operated 70,000 flights last year;  however, only 59% were on time.