TAP Privatisation Explained: Air France-KLM vs Lufthansa and What It Means for Travellers

What is actually for sale

The sale runs under Decree-Law 92/2025, approved by the Council of Ministers on 10 July 2025, promulgated by President Marcelo Rebelo de Sousa on 7 August and published in the Diário da República on 14 August. Its title calls it the "first phase" of TAP's reprivatisation. Up to 44.9% of TAP's capital goes by direct sale to a single reference investor. Up to 5% is reserved for employees, and any employee shares left untaken can pass to the investor, so the buyer's ceiling is 49.9%. The State keeps at least 50.1%.

Several assets are excluded. ECO reported in December 2025 that the "reduto TAP" land next to Lisbon airport, the Cateringpor stake and the SPdH/Menzies handling stake stay outside the deal. The tender specification, Council of Ministers Resolution 141-B/2025 published on 22 September 2025, gives the State a right of first refusal on any later resale, exercisable within 120 days, imposes a five-year lock-up on the buyer's shares and lets the government halt the process at any time on public-interest grounds without compensation. It sets no minimum price. We found no golden-share clause. State control rests on its 50.1% and on a shareholder agreement that has not been published.

Only large airline groups could bid. Candidates needed an air operator certificate, or control of a certified operator, and aviation revenue above €5 billion in at least one of the previous three years. That threshold excluded investment funds, smaller airlines and consortia like the one that bought TAP in 2015.

The resolution lists ten evaluation criteria: the price and payment terms, aviation management capability, financial sustainability, an industrial and strategic plan with investment guarantees, connectivity and hub development, public service obligations, the absence of regulatory obstacles, acceptance of regulatory commitments, respect for labour agreements, and a vision for the shareholder base and sustainability. The binding objectives add the TAP brand, the location of its headquarters and connectivity at the main national airports and in the Azores and Madeira. No weighting for any criterion has been published. Any article that tells you the Lisbon hub counts for a given percentage of the score is inventing it.

How TAP got here: three owners in eleven years

In June 2015 the outgoing government signed the sale of 61% to Atlantic Gateway for €10 million, closed on 12 November 2015. The capitalisation that came with it is still disputed: Diário de Notícias reported a €338 million commitment in 2016, while ECO's 2026 reconstruction counts €203.4 million of shareholder loans and €230.9 million committed in total. The two figures have never been reconciled.

The next government reversed the deal in June 2017. Parpública took back 50% of the capital but only 5% of the economic rights; Atlantic Gateway kept 45% of the capital and 90% of the economic rights, and employees held 5%. Then the pandemic arrived. In July 2020 the State rose to 72.5%, paid Neeleman €55 million to leave, and lent TAP €1.2 billion in rescue aid.

On 21 December 2021 the European Commission approved €2.55 billion of restructuring aid in equity or quasi-equity (case SA.60165, Decision (EU) 2022/763). That figure includes the €1.2 billion loan converted into equity; it is not added on top. Separate COVID-damage compensation of €107.1 million and €71.4 million followed. The State took 100%. The remedies shaped Lisbon's market for the next four years: up to 18 daily Lisbon slots, about nine return rotations, went to easyJet from 30 October 2022; Portugália was ring-fenced; TAP sold its Brazilian maintenance arm; and the airline accepted a fleet cap of 99 aircraft and an acquisition ban.

Governance then failed in public. The €500,000 severance paid to executive Alexandra Reis was declared null by the finance inspectorate, which found she was owed about €74,000. On 6 March 2023 the finance minister dismissed CEO Christine Ourmières-Widener and chairman Manuel Beja. A parliamentary inquiry followed. On 28 September 2023 the Costa government approved a decree to sell at least 51% of TAP; the President vetoed it in late October, citing doubts over transparency, and the government fell weeks later. The current decree is the third attempt, and the first to keep the State in majority control.

ECO's itemisation of public money is the cleanest available: €1,200 million in loan, €59 million in interest, €569 million in COVID compensation and €1,516 million in capital increases, minus €25 million repaid when TAP closed its restructuring plan on 12 June 2026, for a total of €3.319 billion. ECO News gives €3.34 billion before the repayment, and the round €3.2 billion used in 2025 predates the final figures.

What a buyer gets: TAP's numbers

TAP carried 16.7 million passengers in 2025, up 3.4%, on revenue of €4.313 billion, up 1.2%. Recurring EBITDA fell to €742.9 million from €875.3 million and recurring operating profit to €243.4 million. Net profit was €4.1 million after a deferred-tax write-down of about €42 million caused by cuts in the corporate tax rate; recurring net profit was €46 million. In 2023, the record year, it had earned €177.3 million.

The squeeze shows in unit revenue. Passenger revenue per available seat-kilometre was 5.49 cents in 2019, peaked at 7.30 cents in 2023 and has since fallen to 7.13 cents in 2024 and 6.96 cents in 2025. Load factor rose over the same period, reaching 84.2% in 2025 and 85.4% in the first half of 2026. TAP is filling more seats at lower fares. That is a pricing problem, and a buyer with a global sales network and a joint-venture partner can attack it more easily than a stand-alone carrier can.

The first half of 2026 made the pressure visible. Revenue rose 4.3% to €2,039.8 million, but recurring EBITDA fell to €181.9 million from €259.2 million and the net loss widened to €99.2 million from €70.7 million. Fuel costs rose 18.7% over the half and 52.3% in the second quarter. The second quarter alone, normally TAP's most profitable, swung from a €37.5 million profit to a loss of about €59.3 million (derived). Cash stood at €1,222.1 million at the end of June after a €350 million senior bond issue.

The balance sheet is in better shape than the income statement. At 30 June 2025 net financial debt was €382.6 million, or €1,737.8 million including leases without a purchase option (derived). Leverage was 2.2 times EBITDA then and 2.6 times at the end of 2025. Fitch rated TAP BB and Moody's Ba3, both stable, in October 2024. The fleet stood at 99 aircraft, the cap set by Brussels, with 71% new-generation Airbus types, an average age of 9.3 years and 22 Airbus aircraft on order. With the restructuring plan closed on 2 July 2026, TAP plans to fly 101 aircraft. A buyer does not inherit a debt problem. It inherits a margin problem and a growth constraint at Lisbon.

The Lisbon hub and the Brazil franchise

Everything a bidder values runs through Lisbon. TAP held 46% of the airport's 2024 seats, according to the footnote in Parpública's sale memorandum, and NAV slot data reported by EngineCowl put it at 48% of allocated slots. Its passenger share was 51% in 2019. The airport is full: declared capacity is 38 movements an hour, and the works that should lift it to 40 start in early 2027. Our Lisbon tourism statistics analysis shows the consequence. Lisbon carried a record 36.1 million passengers in 2025 but grew only 2.9%, the slowest of Portugal's large airports. Slots are the scarce asset, and TAP holds about half of them.

The network is built for connections. TAP flies to 87 destinations in 31 countries. In summer 2025, South America took 37% of its seat-kilometres, Europe 32%, North America 22% and Africa 9%. Parpública's memorandum says 52% of TAP's Americas–Europe passengers connect in Lisbon; in 2019 management put the share of all passengers connecting at 57%. Those two figures measure different things and should not be merged into the "about half" that circulates.

Brazil is the franchise. TAP served 13 Brazilian cities in 2025, nine of them with no other European airline, and adds Curitiba from July 2026 and São Luís from 26 October 2026, for 15. It carried more than 2 million Brazil–Europe passengers in 2024 for the first time, and its CEO has said Brazil accounts for about 30% of revenue. OAG seat data for winter 2026/27, reported by Aviation Week on 1 October 2026, make TAP the second-largest carrier between Europe and Brazil with 23.1%, behind LATAM. Air France-KLM holds 13.5% and Lufthansa Group, including ITA, 13%. Lisbon airport handles 31.4% of all Europe–Brazil seats.

North America is the growth line. TAP carried 1.59 million North American passengers in 2024, up 8.9%, from eight US gateways plus Toronto and Montreal. Orlando becomes the ninth US gateway on 29 October 2026. In Porto, TAP runs 135 weekly flights in winter 2025/26, 13 of them long-haul, and has announced Porto–Luanda and Porto–Praia for 2026. It flies to Madeira and the Azores under connectivity commitments that the tender lists among its binding objectives. TAP's Portugal Stopover programme, which lets transatlantic passengers break their journey in Lisbon or Porto, carried more than 193,000 customers in the first half of 2025, up 74%. Stopovers were 5% of tickets and 9% in June. For Portuguese tourism, that is the clearest channel through which the hub feeds hotel nights.

Two bidders, two plans

IAG left first. The owner of British Airways and Iberia qualified in December 2025 but did not submit a non-binding offer by the 2 April 2026 deadline. It had asked for a clear path to 100% ownership, which the decree does not offer, and Irish trade press noted political opposition in Portugal to handing TAP to the owner of Iberia. Air France-KLM and Lufthansa remained, and on 4 September the government opened a negotiation phase with both because their offers had a "very close" overall evaluation.

Air France-KLM proposes Lisbon as the group's exclusive hub for Southern Europe, alongside Paris-Charles de Gaulle and Amsterdam. It offers to keep TAP's brand, management and headquarters, to grow in Porto and other Portuguese cities, and to build new maintenance facilities in Portugal. Delta's chief executive Ed Bastian has backed the bid publicly, and the group points to its GOL partnership in Brazil. The French State owns 27.98% of Air France-KLM and the Dutch State 9.13%. The group earned an operating result of €2.004 billion in 2025 and €478 million in the first half of 2026, with net debt of €8.4 billion and €10.3 billion in cash at the end of June.

Lufthansa wants TAP as the group's "primary carrier for the South Atlantic", with Lisbon as a strategic Atlantic hub, in chief executive Carsten Spohr's words. It argues that TAP plus ITA would make the group the market leader between the EU and South America, and cites the brand and headquarters retention at SWISS, Austrian, Brussels Airlines and ITA. Lufthansa Technik's plant at Santa Maria da Feira is due to grow from more than 500 to over 1,000 jobs by 2030, although that project predates the bid. The proposal was developed in coordination with United, Lufthansa's transatlantic joint-venture partner. The group earned adjusted EBIT of €1.96 billion in 2025 but lost €229 million in the first half of 2026, hit by at least €150 million in strike costs; its net debt was €6.7 billion and liquidity €10.7 billion.

Both bidders are paying cash and both have left the door open to a later share swap with the Portuguese State. Neither has a published right to reach a majority. A second phase would need a new decree-law, and PS and Chega, which together can block one, oppose a majority sale. An analyst quoted by Lusa in April 2026 summed up the split as Lufthansa winning on financial strength and Air France-KLM on the Lisbon hub. On the passenger figures, TAP would be 16% of Air France-KLM's traffic and 12% of Lufthansa's (derived). Either way it becomes a mid-sized brand inside a much larger group.

What past takeovers did to hubs

Both groups have bought national airlines before, and the record is measurable. The table compares passengers before and after each deal. The acquired brands survived in every case, and so did their headquarters. Growth was real but uneven, and the acquired hub never displaced the parent's main hubs.

The fare evidence is thinner. No ex-post European study of fares after the SWISS, Austrian, Brussels or KLM deals turned up in our research. The closest European evidence is the Bundeskartellamt's 2018 finding that Lufthansa raised fares by 25–30% on German domestic routes after Air Berlin collapsed, based on 56,064 tickets, and that fares fell back once easyJet entered. That case is about a competitor's exit, not an acquisition. The European Commission's 2024 clearance of Lufthansa's ITA stake shows the likely shape of any remedy: slots at Milan Linate and access to short-haul and transatlantic routes for rivals, which went to easyJet, IAG and Air France-KLM in November 2024.

What it means for travellers

Nothing changes on a TAP ticket before the deal closes, which is expected in 2027. The government picks a bidder around mid-October, negotiates final contracts, signs by 31 December 2026 and then waits for regulators. Bookings, Miles&Go balances and Star Alliance status work as they do now until then.

Alliance and loyalty. This is the clearest difference. A Lufthansa win keeps TAP in Star Alliance, where it has been since 2005, and would most likely bring Miles&Go into Miles & More over time. An Air France-KLM win would move TAP to SkyTeam and Flying Blue. The precedents set the timing. SAS left Star for SkyTeam on 1 September 2024, four days after Air France-KLM closed its stake and about 11 months after the deal was announced. ITA left SkyTeam about three and a half months after Lufthansa closed in January 2025 and joined Star, moving its members to Miles & More, on 1 April 2026. ITA's Volare points were not converted, so members had to spend them. Neither bidder has published conversion terms for Miles&Go.

Routes and fares. Both bidders compete with TAP on routes from Lisbon and Porto to their home hubs: Paris and Amsterdam for Air France-KLM; Frankfurt, Munich, Zurich, Brussels, Vienna and Rome for Lufthansa Group. No seat data on those overlaps has been published, which is why the European Commission's review matters. On Brazil the two outcomes are almost identical: adding each bidder's Europe–Brazil share to TAP's gives about 36.6% with Air France-KLM and 36.1% with Lufthansa (simple sums, derived). Either deal would combine TAP with one of the next-largest European carriers on the route.

Reliability. OAG data compiled by TravelRadar ranked TAP the least punctual European airline measured in October 2025, at 59.09% on time across 10,515 flights, while cancellations were only 0.05%. Regularity, the share of scheduled flights actually operated, was 98.9% in 2024. Punctuality at Lisbon is largely an airport-capacity problem, and no buyer can fix that before the new airport opens.

For travel to Portugal. The tourism stakes sit in the long-haul network. If the buyer keeps growing Brazil and North America from Lisbon and Porto, inbound capacity from Portugal's long-haul markets keeps rising. If it routes some of that traffic through Paris, Amsterdam, Frankfurt or Munich instead, Portugal loses non-stop seats. Both bidders have promised growth in Lisbon and Porto, and the tender lists connectivity and the TAP hub among its objectives. The shareholder agreement, still unpublished, will show whether those promises are enforceable. If you are planning a trip now, our Lisbon travel guide covers where to stay and what has changed in the city.

Ten claims tested

The TAP sale has generated a lot of confident coverage, and some of it repeats figures that do not survive a check against the decree, the tender or the companies' filings. Three of the claims below come from our own earlier work, including our planning document's 31% Brazil figure, which turns out to describe Lisbon airport rather than TAP.

Risks and what to watch

The decision itself. The government can still stop the process without compensation, and it extended its own deadline once. If the State Budget debate or a political crisis delays the choice past mid-October, the 31 December signing deadline tightens.

Brussels. Whether the Commission reviews the deal at all depends on whether 44.9% plus the shareholder agreement gives the buyer joint control, through veto rights over the business plan, budget or senior management. That agreement is not public. If the deal is notified, Phase 1 takes 25 working days, or 35 with remedies; Phase 2 adds 90 to 125 working days. Lufthansa–ITA went to an in-depth investigation and was cleared with conditions on 3 July 2024. Both bidders also have another review open: Air France-KLM's move to 60.5% of SAS, now targeted for closing by the end of 2026, and Lufthansa's step to 90% of ITA, expected in the first quarter of 2027.

Fuel and margins. TAP's 2026 losses came from fuel, not demand. A buyer underwriting the deal on 2023 margins would be wrong. Recurring EBITDA fell 15% in 2025 and another 30% in the first half of 2026.

Labour. The pilots' union SPAC backs privatisation only with a buyer of "solid integrity" and has warned about Lufthansa's dispute with its own pilots' union. The cabin crew union SNPVAC said it learned of the offers from the press. Both bidders' collective agreements will be tested in the final negotiation.

Lisbon capacity. No owner can add slots that do not exist. Capacity rises to 40 movements an hour only after works from 2027, and the new Luís de Camões airport is not scheduled before 2036–37. Growth for either bidder will come first from bigger aircraft and from Porto.

What this means for travelers, businesses and analysts

Travelers. Book TAP as normal: nothing changes before 2027, and EU passenger rights apply under any owner. If you collect Miles&Go, spend balances you do not need, because the ITA precedent shows points may not convert when a programme is folded into another. TAP's Lisbon hub gives one-stop connections from up to 15 Brazilian cities and nine US gateways, and the stopover programme is the easiest way to add a few days in Lisbon or Porto to a long-haul trip. Expect punctuality at Lisbon to stay poor until the airport's capacity rises. For planning a stay, start with our Lisbon travel guide.

Tourism businesses and investors. The binding constraint on TAP's value is Lisbon's slot capacity, and the binding constraint on its earnings is unit revenue, which fell in 2024 and 2025 before fuel costs turned the first half of 2026 into a loss. Inbound operators selling Portugal in Brazil and North America should watch three thresholds: the buyer's first published network plan for winter 2027/28, any reduction in Lisbon–Brazil frequencies in favour of the buyer's own hubs, and the alliance switch date if Air France-KLM wins, which will change how TAP is sold through partner channels. The shareholder agreement will decide how far the State can enforce hub and connectivity promises. Until it is published, treat both bidders' commitments as statements of intent.

Journalists and analysts. Citable figures: the buyer gets up to 44.9% plus unclaimed employee shares, the State keeps 50.1% (DL 92/2025); €3.319 billion of public money net of repayments (ECO itemisation); €2.55 billion of EU-approved restructuring aid including the converted €1.2 billion loan (Decision (EU) 2022/763); 16.7 million passengers, €4.313 billion revenue and €4.1 million net profit in 2025 (TAP); a €99.2 million net loss in the first half of 2026 (TAP); 46% of Lisbon's 2024 seats (Parpública); 23.1% of Europe–Brazil seats in winter 2026/27 (OAG via Aviation Week). Do not repeat "49.9% to the winner", "18 slot pairs", "€1.2 billion on top of €2.55 billion", any criterion weighting, or "closes in 2026". Treat "more than €1 billion" as unofficial until the government publishes the price. The series finding this article adds is a recurring one: the decisive document is unpublished. Lisbon has no published carrying-capacity study and no post-purge AL ratio; the TAP sale has no published price and no published shareholder agreement.