Air France-KLM and Lufthansa lodge binding offers for TAP Air Portugal as Lisbon eyes decision by September

Air France-KLM and Lufthansa each submitted binding offers on Wednesday for a minority stake in TAP Air Portugal, moving the long-awaited privatization of the state-owned carrier into its decisive phase. The Portuguese government, through state holding company Parpública, now has 30 days to evaluate the proposals and produce a report for the ministers responsible for finance and air transport, with a final decision on the winning bidder possible between late August and early September.

Binding offers submitted

Both groups confirmed they had lodged firm bids before the deadline, as expected after they were the only two to present non-binding offers in April. Air France-KLM said it is seeking a stake of between 44.9% and 49.9%, while Lufthansa did not disclose the exact share it is targeting. Parpública's reference sale is 44.9% of TAP's share capital, set out in the tender terms approved by Council of Ministers resolution 141-B/2025, and the process provides for the sale of up to 49.9% in all, of which 5% is reserved for employees; any shares the employees do not take up pass to the reference investor, which is what sets the ceiling of the Franco-Dutch bid at 49.9%. The right of first refusal in the same resolution belongs to the Portuguese state, over any later sale of those shares by the investor. The state keeps a majority holding either way. The offers include both a financial component, price per share, total value, and valuation assumptions, and a technical plan covering strategy, employment, and growth commitments.

This is not just a financial proposal for an airline. It is an ambitious, long-term, comprehensive and complete strategic plan for TAP and for Portugal as a whole.

What the bidders promise

Air France-KLM's proposal emphasizes integration with its global network and a close partnership with Delta Air Lines, which it says would strengthen transatlantic routes. The Franco-Dutch group also pledged to expand maintenance and overhaul operations in Portugal, creating jobs and giving TAP access to modern technologies. Lufthansa, for its part, stressed its intention to preserve TAP's national identity and develop Lisbon as a strategic hub for South Atlantic traffic, particularly to Brazil. The German group is already building a maintenance facility in Portugal that is expected to employ 1,000 people by 2030.

We want to strengthen Portugal's national airline as part of the Lufthansa Group and as the leading carrier for the South Atlantic, with Lisbon as its strategic hub.

Both suitors have committed to keeping the TAP brand, its own management, and the Lisbon hub. Infrastructure Minister Miguel Pinto Luz cautioned two weeks ago that the decision would not be based on price alone. Observador reports that despite those words the financial component weighs decisively: it is the first entry in a grid of more than 10 criteria that will rank the bids and pick the winner.

A proposal of this nature is obviously complex, with many vectors that require analysis. It is a strategic decision, which should not be confined to price and therefore demands consideration and discretion.

Evaluation and timeline

Parpública has 30 days to assess the bids and deliver a report to the government, a deadline it says it intends to keep, although the clock can be stopped if the bidders ask for clarifications. If the evaluation finds the proposals too close to call, the non-binding offers in April were described as strategically and financially equivalent, the cabinet may decide to open a new negotiation round with one or both candidates to seek improved terms. The government has shown urgency in completing the sale, aiming to select the future private shareholder by the end of October, when the 90-day validity of the binding offers expires. However, the actual closing of the deal will depend on regulatory approvals, notably from the European Commission. Neither group said what it is offering and the government has not published the value of the April bids; Bernstein analysts put the 44.9% stake at around 700 million euros, based on a valuation of 1.5 billion euros for the whole airline.

TAP's current position

TAP Air Portugal employs around 7,700 staff, including 1,200 pilots, and operates a fleet of about 100 Airbus aircraft. Its net profit fell by more than 92% in 2025, a decline attributed mainly to a tax effect. The airline's strong position on routes to Brazil and other Lusophone markets makes it an attractive asset for both European groups seeking to expand their South Atlantic footprint.