Portugal puts national airline TAP up for sale

Avatar photo

The Portuguese government has decided to sell a majority stake of at least 51% in the public airline TAP, which opens the way to a consolidation increase in airlines and a potential bidding war involving IAG, Air France-KLM Or Lufthansa.

Fernando Medinathe Portuguese finance minister, said on Thursday that the cabinet had approved the privatization of the airline (wholly government-owned) and that at least 51% of its shares would be sold by reserving up to 5% has his employees. Fernando Medina, said he was looking for large-scale investors, alone or in consortium, who would exploit their control of the airline to develop its domestic hub in Lisbon. Other established requirements are increased flights “point to point” and the offer in the airports to unused capacities like that of Port.

TAP Air Portugal as it was renamed, the value of which is estimated at approximately 1 billion euros and which returned to profit last year, is emerging from years of difficulties that included near bankruptcy, a government bailout and scandals. “The content of the decree envisages objectives of growth of the TAP, growth of national poles, growth and employment in the aviation sector, better use of national airports and better pricing”said Fernando Medina. “We are not seeking to attract pure investments of a financial nature that seek to enter into TAP and then sell it or parts of it and we wish to reiterate TAP’s strategic contribution to the country.”

The decision to privatize the airline paves the way for more consolidation in the European aeronautical industry, after the German Lufthansa acquired a 41% stake in ITA Airwaysthe Italian company formerly known as Alitalia, and International Consolidated Airlines Group (IAGparent company of British Airlines) has agreed to buy 80% of the Spanish company Air Europa for 400 million euros. The three main airline groups in the region, IAG, Lufthansa and Air France – KLM have each declared that they are seeking acquisitions and expressed their interest in TAP, which would open up the increasingly lucrative South American market.

John Walker Avatar