TAP deal would lift Lufthansa to 36% of Europe-Brazil market

Lufthansa’s planned acquisition of 49.9% of TAP would give the German group a 36% share of flight capacity between Europe and Brazil, according to data compiled by aviation analytics platform OAG for ECO. Brazil is the core strategic asset in TAP’s partial privatisation and would strengthen Lufthansa’s position on one of the most important Europe-Latin America air corridors.

TAP alone has a 23.1% share of capacity on Europe-Brazil routes in the IATA winter season from October to March, slightly behind LATAM’s 24.6%, according to the OAG data. Adding TAP to Lufthansa group airlines already serving the market — ITA with 5.5%, Lufthansa with 5.4% and Swiss with 2% — would take the group to 36%, well ahead of Air France-KLM on 13.4% and IAG, owner of British Airways and Iberia, on 11.3%.

The Brazilian market was the main attraction in the sale process, in which Lufthansa beat Air France-KLM for the stake. Lufthansa chief executive Carsten Spohr said TAP would remain the group’s spearhead in Brazil, adding that the company wants passengers who now fly to Brazil via Frankfurt, Zurich or Munich to connect through Lisbon in future.

The deal would also expand Lufthansa’s scale across Latin America. Spohr said the group currently has a 9% share of capacity to the region and that, together with TAP, this would rise to 20%, putting it on a par with IAG. TAP is due to serve 15 cities in Brazil and offer 100 weekly flights once its new São Luís do Maranhão route starts later this month.

Portugal’s cabinet approved the sale to Lufthansa last week. The government wants contracts prepared and signed by the end of the year, after which the transaction faces a lengthy regulatory review, with European Commission competition approval expected to be the toughest stage. The process is not expected to be completed before 2028.

Originally published at Eco.pt