Air France-KLM group has expressed interest in acquiring a stake in Portugal’s flag carrier, TAP Air Portugal. TAP reportedly holds a unique position in the European aviation market, particularly due to its dominance in air travel between Europe and Brazil.
As published by Bloomberg, the group is ready to present its candidacy as part of the TAP privatization process, targeting a sale of at least 49% of TAP.
Meanwhile, other major airlines groups are also interested in TAP, and will be a part of the competitive bidding process that could influence transatlantic travel alongwith major airline alliances, and also affecting travel partnerships.
TAP with its robust hub in Lisbon (LIS) and a fleet of 81 aircraft including Airbus A330, Airbus A321 and Airbus A320 planes, represents Portugal’s aviation prowess.
Portugal's Prime Minister Luis Montenegro, who had previously insisted on a total privatisation of TAP, has signalled that a partial sale was a possibility.
Also in October 2022, Air France KLM had confirmed its interest in TAP. At the press conference to present the 2022 quarterly results, the executive president of the carrier, Ben Smith, revealed that TAP Airlines is still not far away could be “an option”.
Air France-KLM CEO Ben Smith stated,
“Air France-KLM stands ready to present its candidacy as part of the TAP privatization process,” emphasizing that TAP’s strong brand, image, and fleet would be preserved in line with conditions set by the Portuguese government.
To coincide with this newly expressed interest, Smith visited Portugal with French President Emmanuel Macron to discuss a potential deal.
The plan is to boost connectivity within Portugal, including secondary cities, and to enhance the group’s competitive edge in transatlantic routes. This strategic move not only signals a commitment to modernizing European aviation but also positions Air France-KLM to better serve the lucrative market between Europe and South America.
As mentioned earlier, Air France-KLM isn’t the only player to aim a stake on TAP. The Lufthansa Group has also expressed interest in acquiring a stake, reportedly considering a 19.9% share, though acquiring a controlling stake would raise regulatory hurdles.
International Airlines Group (IAG), the parent group behind British Airways, Aer Lingus, and Iberia, is another contender. IAG’s director, Jonathan Sullivan, stated,
“Over time, we would like to have a path towards a majority [position] because it would give the business the possibility to grow.”
IAG sees TAP as a strategic asset that can help bolster its transatlantic network and strengthen its presence in South America. With IAG’s history of pursuing key European assets, its interest in TAP signals broader ambitions to dominate the competitive transatlantic market, even as it continues to focus on its Madrid hub.
Currently, TAP is in Star Alliance, the same alliance as Lufthansa and United Airlines. IAG’s airlines, however, are in Oneworld with American Airlines and Alaska Airlines, while Air France and KLM are in SkyTeam with Delta.
If another airline takes a controlling stake in TAP, it could shift alliances, which we saw with Lufthansa’s acquisition of Italy’s ITA or Scandinavian Airlines’ (SAS) move from Star Alliance to SkyTeam after an investment from Air France-KLM.
In 2024, Air France-KLM transported 4.5 million passengers to and from Portugal, a 40 percent increase compared to 2019. The group plans to expand its operations further in 2025, increasing its capacity by 10 percent across its network.
Air France-KLM has been expanding its investments in European airlines. In 2024, it acquired a 20 percent stake in Scandinavian carrier SAS, positioning itself as a major player in regional aviation.
Display Picture Courtesy: Alex McCrea
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