Portugal has announced plans to sell a 49.9% stake in TAP SA, marking its latest effort to privatize Europe’s largest wholly state-owned airline. Prime Minister Luis Montenegro revealed that 5% of the stake will be reserved for TAP workers, with the remaining 44.9% open to one or more investors.
Investor Interest and Strategic Importance
Montenegro expressed confidence in attracting significant interest, stating, “It’s our conviction that there will be a lot of interested parties.” Bids will be evaluated based on financial, technical, and strategic criteria. Major European airlines like Air France-KLM, Deutsche Lufthansa AG, and IAG SA (owner of British Airways) have already shown interest in TAP.
TAP’s Unique Appeal
TAP stands out as the leading European provider of air links to Brazil, with a strong presence in Africa and numerous flights to North America. The government insists on maintaining TAP’s hub in Lisbon and preserving strategic routes, including those connecting the Portuguese diaspora and the Madeira and Azores archipelagos.
Political and Historical Context
A previous privatization attempt was derailed earlier this year due to political turmoil. The current government, elected in May, aims to avoid opposition backlash by selling less than 50% of the airline. Notably, Portugal had previously sold a 61% stake in TAP in 2015, only to partially reverse the decision under a new administration.
Financial Performance
TAP carried 16 million passengers in 2023, a 1.6% increase from the previous year. The airline returned to profitability in 2022 after five years of losses and has remained profitable since.
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