Lufthansa’s partnership with United Airlines on TAP’s route

The Lufthansa Group will include in its proposal to TAP the possibility of the Portuguese airline joining the lucrative transatlantic partnership with United Airlines and Air Canada, ECO has learned. The process will be identical to the one already underway with ITA Airways.

The Portuguese airline, like Lufthansa, is part of the Star Alliance frequent flyer programme, but does not have access to the North Atlantic joint venture, a geographical area that accounted for around a fifth of the German group’s revenue in the first nine months of this year. Transatlantic routes are usually among the most lucrative for European aviation groups and have a significant impact on their profitability.

Lufthansa’s proposal for the reprivatisation of TAP will therefore include the possibility of the Portuguese carrier joining the partnership with United Airlines and Air Canada, following the same process currently underway for ITA Airways. TAP flies to nine destinations in North America. This region, together with South America (the most important), accounted for half of the Portuguese carrier’s revenues in the first half of 2025.

Integration into the joint venture, involving a coordination agreement on flight offerings, pricing and revenue sharing, is subject to approval by regulators on both sides of the Atlantic. The application for ITA Airways in the US was submitted about two months ago. Lufthansa CEO Carsten Spohr stressed in a recent interview with Il Sole 24 Ore the importance of “support from the Italian government” to secure Washington’s approval.

Lufthansa is not the only one considering joining the transatlantic partnership with TAP. The Air France-KLM group, which has a joint venture with Delta Airlines, has also expressed its willingness to do so.

The German group, the leader in revenue in Europe and the fourth largest in the world, has been one of the protagonists in the European consolidation process. First with the acquisition of Eurowings in 1995, then Swiss in 2007, followed by Austrian Airlines in 2009, and Brussels Airlines, wholly owned since 2017. More recently, it launched the acquisition of 41% of ITA Airways for €325 million, a deal that was closed in January this year.

Lufthansa hopes to complete ITA integration before the sale of TAP

The need to “digest” the integration of the Italian airline is one of the factors that has been pointed out as a disadvantage in the race for TAP, but, according to ECO, Lufthansa intends to complete the most significant part of this process before the privatisation of 49.9% of the Portuguese carrier is completed.

The German group’s executive management has put forward an 18-month timetable for the ITA integration process, i.e. between May and June, when it intends to increase its stake in the Italian company to 90%. However, the Portuguese government hopes to finalise the selection of TAP’s buyer next month. “I think we should have an initial decision in July”, said Secretary of State for Transport Hugo Espírito Santo this week during the 50th National Congress of the Portuguese Association of Travel and Tourism Agencies (APAVT), held in Macau.

On 22 November, Parpública said it had received three expressions of interest from the Air France-KLM, Lufthansa and IAG (owner of British Airways and Iberia) groups. The entity responsible for the sale of TAP will now have to submit an initial report to the government.

This will be followed by a lengthy process involving the submission of non-binding proposals by the candidates – detailing the purchase price (after due diligence on TAP’s accounts) and investment plans – followed by binding proposals and, around July, the government’s selection of the winner of the privatisation. The Executive may also opt for a direct negotiation process to obtain an improved proposal.

With limited route overlap, Lufthansa is unlikely to face significant regulatory hurdles in acquiring 49.9% of TAP, although it aims, as in its other acquisitions, to achieve a majority stake.

“In addition to initially acquiring a minority stake, the aim of the process is to establish a long-term partnership between the Lufthansa Group and TAP Air Portugal in order to ensure the successful future of TAP as Portugal’s national airline”, the German group said in its announcement of interest on 20 November.

In a statement, Lufthansa CEO Carsten Spohr stressed that the Portuguese airline is “of significant strategic importance to the European aviation industry” and pointed to the “substantial investments” planned for Portugal. The German group announced at the end of 2024 an investment of €227.6 million in an industrial unit for the repair of aircraft engines and components in Santa Maria da Feira by Lufthansa Technik.

The German company says it employs more than 400 workers in Portugal, a number that will grow to 1,000 by 2030 with the construction of the aforementioned industrial unit in Santa Maria da Feira.