The chief executive of German flag carrier Lufthansa has reportedly flown to Lisbon to meet with Portuguese government officials to discuss a potential stake in state-owned TAP Air Portugal.
The airline is currently 100% owned by the Portuguese government after it required a bailout when it hit financial difficulties at the start of the pandemic in 2020. The initial plan had been to find a private buyer for TAP last year but a government scandal that engulfed the airline scuppered those plans.
Now, the Portuguese government is once again keenly trying to find an equity partner for TAP, and the Lufthansa Group is one of the favorite contenders for the Lisbon-based carrier.
Lufthansa CEO Carsten Spohr will meet with government officials on Monday to discuss a potential 19.9% stake in TAP Air Portugal.
The equity stake under discussion is far below the 51% stake that Portugal’s previous administration was hoping to sell in the struggling airline and the government is also courting interest from other European airline groups, notably the Air France-KLM Group and potentially IAG, which owns British Airways and Iberia.
IAG in particular may show renewed interest in TAP Air Portugal after it abandoned its planned acquisition of Madrid’s Air Europa last month after the group came to the conclusion that it would near impossible to get the deal past European antitrust regulators.
The Lufthansa Group already owns a slew of European flag carriers, including Austrian Airlines, Brussels Airlines, and SWISS. Last year, Spohr also struck a deal with the Italian government to take an initial 40% stake in Rome-based ITA Airways.
In July, the Lufthansa Group cleared a significant hurdle in getting the deal with ITA Airways over the line after European regulators approved the purchase with minimal concessions.
Announcing its decision, the European Commission said that without Lufthansa’a equity stake, the future of ITA Airways remained uncertain. Lufthansa had, however, been close to abandoning the deal if the concessions demanded by the EU were to onerous.
In the end, the EU demanded ITA Airways give up some takeoff and landing slots for short-haul flights, while the airline will also be required to make unspecified agreements with rival airlines on long-haul routes.
