Lufthansa Expected to Beat Air France-KLM to Stake in Portuguese Airline TAP
Germany's Lufthansa is poised to beat Air France-KLM in the race to acquire a 44.9% stake in Portugal's national airline, TAP Air Portugal, according to a report by Portuguese broadcaster SIC cited by Reuters on Tuesday. The Portuguese government is expected to announce its decision at an extraordinary Cabinet meeting today.
According to the report, two factors explain Lufthansa's reported advantage. Lufthansa reportedly offered to pay entirely in cash for its stake in TAP. SIC also cited the German group's stronger financial position as a factor in its favour. The Franco-Dutch group's proposal reportedly combines cash with shares in Air France-KLM. The difference in the proposed payment structure may have helped Lufthansa, although the precise offers and valuations have not been disclosed.
The Portuguese Infrastructure Ministry declined to comment on the report. Reuters has not published the actual offer amounts, so it is not possible to establish how much either group was prepared to pay or how large the difference between the bids was.
The European Commission approved a restructuring-aid package involving €3.2 billion in support for TAP in 2021, following an initial €1.2 billion rescue loan in 2020. The support came with conditions, including operational restructuring, asset sales and measures intended to protect competition.
In June 2026, the Portuguese government announced that the European Commission had confirmed the successful completion of TAP's restructuring plan. The remaining commitments included the sale of ground-handling and catering interests and the repayment of approximately €25 million to the state.
Prime Minister Luís Montenegro has said the government wants TAP to become profitable and financially sustainable rather than requiring further public support.
TAP offers more than an established European airline. Its biggest strategic asset is its Lisbon hub and its extensive connections between Europe, Brazil and other Portuguese-speaking markets. TAP has a particularly strong position on routes between Europe and Brazil. Aviation industry data cited by Aviation Week put TAP's share of Europe–Brazil capacity at 25.6%, ahead of LATAM at 22.9% and Air France at 9.4%.
TAP also connects Portugal with African destinations where Portuguese is widely spoken. Access to take-off and landing slots at Lisbon's busy airport is another important asset, while the airline has also made investments in its Airbus fleet, including fuel-efficient A320neo-family aircraft and A330neo long-haul aircraft.
Air France-KLM had its own strategic case for buying into TAP. Chief executive Benjamin Smith said in April that TAP was a natural fit for the group's multi-hub strategy. Under its proposal, Lisbon would become the group's exclusive southern European hub, complementing its existing operations in Paris and Amsterdam.
The group also said it wanted to strengthen TAP's operations in Lisbon while developing connectivity elsewhere in Portugal, including Porto. Its September final offer covered a stake of up to 49.9% and included plans for passenger services, cargo, loyalty programmes and aircraft maintenance.
Lufthansa already has an established presence in Portugal. In its July 2026 bid announcement, Lufthansa said its airlines operated 353 weekly flights to and from Portugal and employed more than 500 people in the country. It also pointed to a new Lufthansa Technik facility near Porto, with employment there expected to rise to more than 1,000 by 2030. Lufthansa Technik is the group's aircraft maintenance and engineering business
The sale and transfer of shares are expected to take place in 2027, according to the timetable reported by Portuguese business outlet ECO News.