Government To Approve TAP Air Portugal Privatisation Plan This Month

Portugal’s TAP Air Portugal is on short final to be privatized. Three European airline groups have already expressed interest in snapping up the best provider of European flights to Brazil.

TAP Air Portugal to be only partially privatized

As previously covered in July 2023, the Portuguese government intends to privatize TAP Air Portugal in October. However, one should note that the airline’s privatization process will include the Portuguese government intending to keep a strategic stake in the airline. According to an Aerotime Hub report, the equity stake is to guard the national interest with Lisbon Airport (LIS), pictured below.

Photo: Wirestock Creators / Shutterstock

ch-aviation.com news reported the next day that Prime Minister Antonio Costa announced;

“As the European Commission recognises, we are implementing the restructuring plan successfully, and I can confirm that next week we will approve the diploma that establishes the framework for the privatisation of TAP, defending the company and the interests of Portugal and the Portuguese.”

Nonetheless, large European airline groups like Air France-KLM, Lufthansa, and the International Airlines Group (IAG) have stated interest in bringing TAP Air Portugal into their orbit. ch-aviation.com news also reported that the Brazilian legislative Chamber of Deputies has a committee mulling over having Brazil buy a national stake in TAP Air Portugal.

Route network and fleet driving interest

One should note that after Iberia of the International Airlines Group (IAG), it’s TAP Air Portugal with the second largest European to Latin America flights with more flights to Brazil recently added. With that, one can listen to a March 24 podcast with Dr. Henri-Charles Ozarovsky, Head of Strategy, Network & Partnerships at TAP Air Portugal to discuss TAP Air Portugal’s network:

Additionally, as per a September 19 Airline Weekly report, Portugal’s position as the most southwestern nation makes it “ideal for transatlantic hub connections — offering the shortest and most cost-efficient transfers from Europe.”

Additionally, TAP Air Portugal is almost exclusively an Airbus fleet of upgraded A320 and A330 families, thereby having some standardization. As per below, TAP Air Portugal has put its 12 Airbus A321LRs to good use from its strategic location:

For IAG with Iberia having a hub in Madrid, Spain, IAG’s current Latin American connections would be significantly bolstered. For the Lufthansa Group, it’s an opportunity to expand in a different direction than its current focus of finishing acquiring Italy’s ITA.

But for Air France-KLM that lost out on ITA, it’s CEO Ben Smith said on a May 5 earnings call that,

“TAP has a very strong position geographically at the southernmost point in Europe towards South America, and they do have a very strong network to Brazil with 11 cities online nonstop out of Lisbon. So it’s very interesting and could be potentially eventually accretive to our bottom line performance.”

Nonetheless, a Portuguese union stands opposed to full privatization

According to a bnn.network report, The National Union of Civil Aviation Workers (Sintac) is in very public opposition to full privatization of TAP Air Portugal. Sintac is concerned that whatever partner is chosen might take over and strip the airline for parts. Comments by Portuguese Prime Minister Costa saying the percentage of share depends on the partner increase Sintac’s concerns.

What are your thoughts of what the outcome will be? Please share with civility in the comments.

Sources: Aerotime Hub, Airline Weekly, bnn.network, ch-aviation.com news