Price set to decide between TAP bidders, minister says

Portugal says Air France-KLM and Lufthansa have submitted similarly strong industrial plans for TAP, making price a key factor in choosing a buyer.

Price is likely to be the deciding factor in Portugal’s TAP privatisation after Air France-KLM and Lufthansa submitted what Infrastructure Minister Miguel Pinto Luz called “very equivalent” industrial plans, a key step in the sale of a stake in the flag carrier that matters for airline consolidation and connectivity in Portugal.

Speaking after the Council of Ministers approved a formal invitation for both groups to submit binding offers, Pinto Luz said the “financial valuation criterion will be essential” in selecting the buyer for 44.5% of TAP. That stake could rise if employees do not take up the full 5% reserved for them. He said the prices indicated in the non-binding phase were not disclosed for confidentiality reasons, but added that they were also “very equivalent”.

According to the government, both bids meet the tender requirements and are aligned with the selection criteria. Pinto Luz said both groups committed to maintaining connectivity with Portugal’s autonomous regions, Portuguese-speaking countries and the diaspora, while preserving a significant role for Lisbon as a European hub and expanding operations in Porto. The plans also include growth in maintenance and engineering services in Portugal, fleet investment and support for national sustainable aviation fuel initiatives.

The two airline groups were the only bidders to submit non-binding offers by the April 2 deadline, after IAG stayed out of the process. Under the tender rules, they now have 90 days to submit binding offers to state holding company Parpública, taking the deadline to July 22. After that, Parpública will prepare a new report and the government will either choose a winner or open a negotiation phase for improved final offers.

Pinto Luz said the war in the Middle East could affect TAP’s valuation because of its impact on fuel prices, although Finance Minister Joaquim Miranda Sarmento said both bidders were looking at the airline from a medium- to long-term perspective and that its strategic value remained intact. On that timetable, and subject to regulatory approvals including from Brussels, the sale of 49.9% of TAP is only expected to be completed in 2027.

Originally published at Eco.pt