TAP maintenance unit emerges as key asset in privatisation

TAP’s maintenance and engineering division has become a key asset in the airline’s privatisation, with the business growing faster than passenger transport and generating higher margins. The unit now provides a meaningful share of operating profit and serves third-party airline customers worldwide.

Between 2022 and 2025, turnover in TAP’s air transport business rose 20%, while maintenance and engineering revenue jumped 98% to €262 million, equal to 6.1% of the group’s total revenue. The division accounted for 12.4% of operating profit, with an operating margin of 12.1%, more than double the 5.6% margin in passenger transport. In the first quarter, maintenance revenue rose 31% year on year.

Engine work is the core of the business. Although only a small part of TAP’s maintenance campus is dedicated to engines, that activity generates about 90% of maintenance revenue. TAP services around 100 engines a year and says 70% of its engine maintenance work is for external clients, compared with 10% in aircraft base maintenance. Customers span five continents and include Lufthansa and Air France-KLM, the two groups competing to buy 44.9% of TAP.

José Moreira, TAP’s head of maintenance and engineering, told ECO the company aims to keep maintenance revenue growing at a double-digit rate. He said TAP’s ability to repair both older CFM56 engines and newer LEAP-1A engines helps reduce exposure to market swings.

Financial analyst Nuno Esteves said the division’s profitability, competitive European position and strategic potential increase TAP’s value in the privatisation process.

There are also execution risks, notably a shortage of mechanics. TAP lost 49 workers in 2025 as some left for better pay elsewhere in Europe, and competition for skilled labour is set to increase with Lufthansa planning a parts and engine maintenance unit in Santa Maria da Feira in 2027.

Originally published at Eco.pt