TAP Air Portugal agreement remains a potential Focus for Air France-KLM
Air France-KLM, a leading European airline group, is still actively engaged in negotiations to acquire a stake in TAP Air Portugal, as part of the Portuguese government's plan to privatize up to 49.9% of the airline by 2026. The government's privatization process includes a four-phase approach: pre-qualification, proposal submission, binding offers, and final negotiations.
Air France-KLM is considered a leading candidate for this investment, alongside Lufthansa and IAG. However, the exact conditions or terms that Air France-KLM might secure have not been fully disclosed yet. The Portuguese government specifies that the privatization will maintain strategic oversight on key routes, which some critics argue could restrict new management’s operational flexibility.
In a recent press conference call, Benjamin Smith, CEO of Air France-KLM, addressed TAP during the discussion. He acknowledged that the conditions for investing in TAP are not straightforward, but did not elaborate further. The privatisation specifications for TAP are expected to be released next week.
Interestingly, Air France-KLM has abandoned the deal to acquire a stake in the private Spanish airline Air Europa. According to Smith, reaching a majority position in Air Europa was extremely important, but it doesn't seem possible.
TAP's strategic importance for Lisbon’s hub and traffic to Brazil is a key factor influencing the government's decision to attract a strong airline partner like Air France-KLM. The sale process is underway, but final terms remain subject to completion of binding offers and negotiations, expected within about a year.
The profit of €401 million posted by Air France-KLM in the first half of the year is a positive financial development for the group. Despite the ongoing negotiations, Benjamin Smith declined to comment on the discussions and negotiations with TAP's owners.
[1] Portugal's TAP Air Portugal to be privatized by 2026 [2] Air France-KLM in talks to buy minority stake in TAP Air Portugal [4] TAP Air Portugal privatization process kicks off with pre-qualification phase
[1] The airline industry is abuzz with the news of Portugal's TAP Air Portugal being set for privatization by 2026, with leading European player Air France-KLM among potential finance partners.[4] Negotiations between Air France-KLM and TAP Air Portugal are progressing, following the commencement of the pre-qualification phase of Portugal's four-step privatization approach.
