Luís Montenegro, the Prime Minister of Portugal, has reiterated that there were many interested parties in buying a stake in TAP Air Portugal
, which has been in a rocky privatization process.
However, Montenegro emphasized that the government will want to ensure that the airline continues to operate strategically important routes from/to Portugal.
Three main parties
Speaking with SIC Noticias, a Portuguese news channel, on October 8, Montenegro was discussing his role in politics as well as the Portuguese state budget for 2025, which was currently being debated in the state’s Parliament.
The Prime Minister also touched on the subject of TAP Air Portugal, the currently state-owned airline. According to Montenegro, many parties have expressed interest in acquiring a stake in the carrier.
Previously, Air France-KLM
, Lufthansa Group, and the International Airlines Group (IAG) have said that they would be interested in potentially acquiring a stake in TAP Air Portugal.
Photo: Alejandro Gonzalez M | Shutterstock
In April, Benjamin Smith, the chief executive officer (CEO) of Air France-KLM, told Portugal-based Jornal de Negócios that the Franco-Dutch airline group would be interested in acquiring a stake in TAP Air Portugal.
Smith warned that conditions, including the price, would have to align with the interests of the group, adding that Air France-KLM would take a more cautious approach in its potential attempt to buy into the Portuguese carrier.
Italy-based Corriere Della Sera cited two Portuguese institutional sources who said that Lufthansa Group
would be meeting with the local government in September for the German airline group to propose their deal for a minority stake in TAP Air Portugal.
Lastly, AviationWeek cited Luis Gallego, the CEO of IAG
, saying that the group was still interested in a potential stake in the Portuguese airline. In August, the group abandoned its attempt to acquire the remaining shares of Air Europa from Globalia, citing regulatory difficulties.
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Retaining strategic routes
During a Portuguese Tourism summit in September, Montenegro said that if a potential suitor would not be able to guarantee the operation of strategic routes, the country would continue managing the airline itself, according to a report by SIC Noticias.
That was a line that the Portuguese government would not allow to cross, Montenegro added, emphasizing that TAP Air Portugal’s hub in Lisbon must remain intact.
Photo: Rebius | Shutterstock
According to data from the aviation analytics company Cirium, TAP Air Portugal had scheduled 1,410 weekly flights out of Portugal on domestic, European, and long-haul flights to Africa, South America, and North America in August, the peak summer season in the country.
One of its key markets and advantages was its flight network to Brazil. Out of the total 297 weekly departures from Europe to Brazil in August, TAP Air Portugal had scheduled 95, or 31.9% of the total weekly frequencies from the Old Continent to the South American country.
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Notably, most of these routes are to Brazilian destinations, with the other two serving Washington, DC, and Toronto.
Complicated sale process
While the Portuguese government had announced its intentions to sell a stake in TAP Air Portugal in September 2023, that government was no longer following the resignation of António Costa, the predecessor to Montenegro, in November 2023.
Even before Costa abruptly abandoned his post, Marcelo Rebelo de Sousa, the President of Portugal, stopped the sale in October 2023, citing a lack of transparency, according to a report by Reuters.
Another hurdle could be a non-legally binding draft resolution that was presented by António Filipe, a member of the Parliament of Portugal, on September 20.
Photo: Vincenzo Pace | Simple Flying
SIC Noticias reported that Filipe urged the government to abandon its plans to privatize TAP Air Portugal, saying that since the carrier was now profitable, there was no point in the government looking for outside investors.
Filipe, who is a member of the Portuguese Communist Party (PCP), presented the resolution on behalf of the PCP, with the provisional decree saying that the privatization process has only destabilized the carrier, the country, and its aviation industry.
He summarized that TAP Air Portugal should be left alone, and instead of the government preparing the carrier for privatization, it should outline long-term goals for the airline.
In addition, the draft resolution urged the government to speed up the construction process of Lisbon’s new airport, Luís de Camões Airport, where TAP Air Portugal could continue growing.
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Despite a rocky privatization process, TAP Air Portugal has achieved its best-ever profit in the airline’s history.
