Portugal has selected Lufthansa to acquire a 44.9% stake in TAP Air Portugal in a transaction the government valued at €1.2 billion, marking another significant step in the consolidation of Europe’s airline industry. The German group defeated rival bidder Air France-KLM.
Prime Minister Luís Montenegro announced the decision on Wednesday. The transaction remains subject to European Union regulatory approval, while the Portuguese government will retain majority ownership initially. A further 5% of the airline’s shares has been reserved for employees.
TAP’s appeal centres on its Lisbon hub and established connections to Brazil, Portuguese-speaking African countries and the United States. Those routes would expand Lufthansa’s reach across the Atlantic and strengthen its presence in southwestern Europe. Portugal also wants the partnership to improve connectivity through Porto, Faro, Madeira and the Azores.
The selection followed a final bidding round launched in September, after the government assessed the two earlier offers as broadly comparable. Both contenders were asked to improve their financial proposals and long-term plans for the Portuguese carrier.
The precise purchase structure includes an employee-share element. The Financial Times reported that Lufthansa offered just over €1 billion for the initial 44.9%, potentially rising to €1.2 billion for 49.9%, depending on staff participation in the share sale.
For Portugal, the decision advances a renewed privatisation effort following earlier unsuccessful attempts. Montenegro said a complete privatisation could be concluded by 2028, although regulatory clearance remains necessary before the current transaction can proceed.
