The Portuguese government has chosen Lufthansa as TAP’s strategic partner. Lufthansa is acquiring a 44.9% minority stake in TAP Air Portugal, winning it from Air France-KLM. The deal is valued at approximately 1.2 billion euros.
By choosing Lufthansa, the German group, which already owns Swiss, Austrian, Brussels Airlines, and ITA Airways, will expand its presence in Europe and strengthen its position on South Atlantic routes to Brazil and Africa. The European Commission still needs to approve the deal, and it is not expected to be finalized until 2028.
A complete sale is being considered
TAP was nationalized during the Covid-19 pandemic, but the Portuguese government has long sought a private partner to acquire a minority stake. The decision is now made: Lufthansa will acquire 44.9% of TAP, the Portuguese government will retain 50.1%, but it could end up holding up to 49.9% of the shares. This is because 5% has been reserved for employees. If the employees do not exercise their right to purchase, Lufthansa’s stake could increase.
In addition, Lufthansa, which will assume executive and operational control of TAP, has made an offer for a second phase: 836 million euros for the remaining 50.1% of TAP, plus a 5% stake in the Lufthansa Group valued at 488 million euros. This is the first time the government has discussed a possible full privatization.
Additional investment
According to Prime Minister Montenegro, Lufthansa’s bid was 16% higher than that of its competitor, Air France-KLM. Lufthansa’s ambitious growth plan for TAP and its offer of new investments in Portugal were deciding factors.
This includes, among other things, expanding Porto, growing the fleet to 130 aircraft, and improving maintenance operations. Lufthansa Technik is also investing approximately 300 million euros in Santa Maria da Feira, 25-30 km south of Porto, creating 700 jobs. At the same time, it would also co-invest in a pilot training school in Tancos, a military airfield in central Portugal.
By the end of 2025, Lufthansa also had a much higher equity ratio (24% versus 6%) and an investment-grade rating, while Air France-KLM fell short.
In addition, Lufthansa’s offer was entirely in cash, whereas Air France-KLM’s consisted of cash plus shares. Air France-KLM’s offer also included a potential additional payment of 100 million euros, contingent on profit and debt targets through 2028. That uncertainty factored into the deal.
Implications for Brussels Airlines?
TAP is a major asset thanks to its extensive network connecting Europe with Latin America and Africa. It has a fleet of about 100 aircraft and employs approximately 9,400 people.
In 2025, the airline posted a profit for the fourth consecutive year. In the first half of 2026, however, it posted a loss of 99.2 million euros, mainly due to high fuel costs.
According to a report by the brokerage firm XTB, TAP accounts for 11% of flights between Europe and South America, behind the IAG Group (20%) and Air France-KLM (17%), but ahead of Lufthansa (9%).
It is not yet clear whether the deal will also affect Brussels Airlines. For years, Brussels Airlines has positioned itself as the Lufthansa Group’s Africa specialist. TAP is a direct competitor: Lisbon has long been a hub connecting Europe, Africa, and Brazil, and TAP flies to Portuguese-speaking Africa (Angola, Mozambique, Cape Verde, etc.) and West Africa.
That last point could cause friction with Brussels, which also offers flights to Dakar, Accra, Abidjan, Conakry, Ouagadougou, etc.
For example, routes may be redistributed, partly because Brussels Airlines is a smaller player than TAP. But at the same time, the deal isn’t necessarily a bad thing.
Lufthansa has a strong presence in English-speaking Africa, while Brussels operates in French-speaking Africa and West Africa; with TAP, it adds Portuguese-speaking Africa and Brazil. In other words, the group can have Brussels and Lisbon refer passengers to each other’s networks, which could increase load factors.
