Lufthansa and Air France-KLM face off in TAP sale

Binding bids for 49.9% of TAP are due on Wednesday, in a decisive step in Portugal’s partial privatisation of the airline, with Lufthansa and Air France-KLM emerging as the two contenders, ECO reported. The future partner is expected to take management control while the state keeps 51%.

According to the privatisation rules, bidders must submit a binding financial offer, including the price for the shares and any variable payments, alongside an industrial and strategic plan for TAP. The government’s criteria include strengthening TAP’s competitive position as a global airline, preserving links with the Portuguese diaspora and Portuguese-speaking countries, expanding operations at national airports and developing maintenance and sustainable aviation fuel activities.

Lufthansa appears to have a slight edge on scale and financial strength. The German group carried 135 million passengers in 2025, versus 103 million for Air France-KLM, and reported revenue of nearly €40 billion against €33 billion for its rival.

Lufthansa’s adjusted net debt stood at €6.99 billion at the end of March, compared with €8.03 billion for Air France-KLM, although the Franco-Dutch group had a slightly stronger operating margin, 6.1% versus 5.1%.

The strategic case is more balanced. Lufthansa can argue continuity because TAP is already in Star Alliance and the German group has experience integrating airlines such as ITA Airways.

Air France-KLM, however, can present Lisbon as its only southern European hub, which may support TAP’s role on routes linking Europe with Brazil, Africa and North America.

Both groups have also publicly signalled interest in expanding TAP beyond Lisbon, including at Porto airport.

Parpública, the state holding company, now has 30 days to assess the documentation and report to the government, which may still ask both bidders for improved final offers. Infrastructure Minister Miguel Pinto Luz has already said he wants the choice of TAP’s future partner to be completed in September.

Originally published at Eco.pt