LISBON— Lufthansa Group is expected to secure a 44.9% stake in TAP Air Portugal (TP), emerging ahead of Air France-KLM in Portugal’s renewed airline privatization process. The Portuguese government is expected to announce its decision on October 14, 2026, following a competitive bidding process involving the two European airline groups.
The proposed investment would give Lufthansa (LH) a significant foothold in Portugal’s national carrier and strengthen its access to markets across South America. According to a Reuters report cited in the available information, Lufthansa’s all-cash offer and stronger financial position helped it gain an advantage over Air France-KLM, which reportedly submitted a proposal combining cash and shares.
Lufthansa Wins TAP Air Portugal Bid
Portugal relaunched its plan to privatize TAP Air Portugal in the summer of 2025, seeking an investor for a substantial minority stake in the state-owned airline. Both Lufthansa Group and Air France-KLM subsequently submitted binding offers, setting up a contest between two of Europe’s largest airline groups.
The Portuguese government was expected to discuss the outcome at an extraordinary cabinet meeting on Wednesday, October 14, 2026.
Although Lufthansa is reported to be the preferred bidder, the proposed transaction will still require the necessary regulatory approvals before the investment can be completed.
The reported preference for Lufthansa reflects the structure of its offer. An all-cash proposal provides a different financial arrangement from Air France-KLM’s reported combination of cash and shares, while Lufthansa’s financial strength may have further supported its position during the selection process.
South America Network Gains
An investment in TAP would strengthen Lufthansa Group’s position in the transatlantic market, particularly on routes linking Europe with South America.
TAP already operates an extensive network connecting Portugal with destinations across the Atlantic, giving a potential investor access to markets where Lufthansa’s own presence is comparatively limited.
The investment could also influence competition between European airline groups on long-haul routes. Lufthansa, Air France-KLM and International Airlines Group control substantial portions of European long-haul aviation, making access to an established carrier such as TAP strategically important.
TAP is already a member of Star Alliance, the same global airline alliance as Lufthansa. However, the Portuguese carrier does not currently participate in the transatlantic joint venture associated with Lufthansa and other partner airlines, leaving open questions about whether a future investment could lead to deeper commercial cooperation.
Any move toward closer coordination would depend on regulatory requirements and the terms of the eventual agreement.
Changes to joint-venture participation could affect how airlines coordinate schedules, capacity and fares, potentially influencing competition on routes between Europe and North America.
Regulatory Approval Remains for Lufthansa
Despite Lufthansa’s reported lead in the bidding process, the selection of a preferred investor would not automatically complete the privatization.
Regulatory authorities would need to assess the transaction, and the final outcome would depend on the approval process and agreed terms.
For Portugal, the proposed sale represents another step toward bringing outside investment into TAP while retaining a stake for the state under the privatization plan.
For Lufthansa, the acquisition would offer an opportunity to expand its network and strengthen its competitive position without having to build an equivalent long-haul operation independently, OMAAT flagged.
Air France-KLM’s reported defeat would leave Lufthansa better positioned to pursue the strategic benefits associated with TAP.
However, the transaction’s final structure, regulatory conditions and potential effects on commercial cooperation will become clearer only when the Portuguese government and the parties involved disclose further details.
Stay tuned with us. Further, follow us on social media for the latest updates.
Join us on Telegram Group for the Latest Aviation Updates. Subsequently, follow us on Google News
