Lufthansa expects faster EU clearance for TAP deal

Lufthansa expects European Commission approval for its planned purchase of up to 49.9% of TAP to move faster than the group’s ITA Airways deal, a key point for Portugal’s airline privatisation and for investors watching the timetable for the transaction. Speaking to ECO after the group’s third-quarter results, chief executive Carsten Spohr said the overlap between Lufthansa and TAP is “much smaller” than in the ITA case.

“We expect complex negotiations, but we remain very optimistic that we will be able to conclude this process with the Portuguese government much more quickly than happened in the case of ITA,” Spohr said. Lufthansa is due to sign the acquisition contract with the Portuguese state on Tuesday. The deal is worth €1.201 billion for the state, with 5% of the stake earmarked preferentially for employees, according to the terms cited by ECO.

Spohr also said the contract with the Portuguese government defines who would bear the cost of any remedies required by Brussels. Asked about the issue, he said: “Our contract with the Portuguese government establishes who will have to bear those costs, if they exist, and we will proceed accordingly.” The Portuguese government said on Monday that any such remedies would be borne by Lufthansa.

In the same briefing, Spohr said the TAP stake would create growth opportunities for Lufthansa, especially in South America, where the group could raise its market share from 9% to 20%. He also pointed to Portugal as a potential base for expanding Lufthansa Group’s maintenance, repair and overhaul activities, citing the country’s engineering skills and the possibility of creating new jobs.

Originally published at Eco.pt