IAG inclined to give up the race for TAP privatization

The airline group IAG is inclined to withdraw from the race for the privatization of TAP, according to information advanced by Bloomberg. The owner of British Airways, Iberia, Aer Lingus and Vueling is not satisfied with the model defined by the Portuguese Government, which plans to sell a minority stake in the airline.

According to the same information, the group led by Luis Gallego considers that acquiring less than 50% of TAP does not guarantee control of the company, which makes the operation less attractive from a strategic point of view.

Even so, no final decision has yet been taken. IAG may still present a non-binding proposal within the deadline set by the Portuguese Government, which ends on April 2, and only later decide whether to move forward or withdraw from the process.

The Portuguese Government intends to sell up to 49.9% of TAP’s capital, reserving a percentage of around 5% for employees. The privatization process also includes conditions related to maintaining Lisbon as a strategic hub and preserving routes considered essential, namely connections to Brazil, North America and Africa.

In addition to IAG, the Lufthansa group and Air France-KLM have already shown interest in the process.

IAG has previously stated that any proposal will only go ahead if it creates value for shareholders and if there is a clear path to some form of control over the airline.

The possible withdrawal of IAG may reduce competition in the process, leaving Lufthansa and Air France-KLM as the main candidates for the acquisition of a stake in TAP.