Portugal’s government selected Lufthansa to buy 44.9% of TAP Air Portugal on Wednesday, October 14, 2026, choosing the German carrier as the strategic partner for the state-owned airline. The selection starts a transaction that still needs final negotiations and regulatory approval.
Air France-KLM was the only other bidder left in the contest. Both airlines submitted improved final offers in late September.
Prime Minister Luis Montenegro told journalists the offer for the stake was €1.025 billion ($1.14 billion). The government’s announcement put the deal’s value at €1.2 billion ($1.3 billion), while Montenegro said the proposal implied a total airline valuation of €2.55 billion ($2.8 billion).
Montenegro said the winning financial offer was 16% higher than its rival’s. He also said the government weighed each company’s industrial plan, including its proposals for growth and long-term sustainability.
The state keeps control while the transaction awaits approval
Portugal will retain at least 50.1% of the shares. The sale plan reserves 5% for employees to purchase; any portion they do not buy may go to the selected investor.
The employee allocation gives staff a route to ownership without changing the state’s commitment to retain a majority stake. The eventual shareholding will depend in part on how much of that reserved portion employees take up.
The government’s selection is not a completed sale. The parties must finish contract negotiations, and the transaction needs approval from European Union regulators. Portuguese government estimates put the European Commission antitrust review at 18 to 24 months.
Montenegro has said the government could complete TAP’s full privatization by 2028. A private majority takeover is not under consideration in the current transaction, although acquiring majority stakes is a stated goal in the German group’s acquisition strategy.
Portugal wants growth beyond Lisbon
TAP’s network gives it access to routes linking Lisbon with Brazil, Portuguese-speaking Africa and the US. The connections support Portugal’s diaspora ties, tourism and investment links; Brazil routes are particularly prized.
Portugal wants the partner to develop service across its airport network, not just at Lisbon. Porto, Faro, the Azores and Madeira are among the locations named for expanded connectivity. Infrastructure Minister Miguel Pinto Luz had said the selection would depend on network commitments beyond the capital, covering Portugal’s nine other airports. Binding proposals were due by 29-Jul-2026.
TAP chief executive Luis Rodrigues argued before the decision that joining a larger group could improve the airline’s access to resources. He spoke at the World Aviation Festival in Lisbon.
“access a larger pool of resources at better value”
The airline’s chairman, Carlos Oliveira, welcomed the decision while stressing that the partnership must deliver tangible results.
“This decision opens new prospects for the company's future. Beyond the arrival of a new shareholder, it is essential to ensure that this partnership translates into concrete growth opportunities, a stronger and more competitive TAP, and the creation of value for Portugal”
Oliveira also said work remained before the deal could close. Until then, he said, the company would focus on its strategy, customers and responsibilities, adding: “We look to the future with confidence, ambition, and a sense of responsibility”.
A maintenance subsidiary of the German group is also building a repair and maintenance facility in Santa Maria da Feira, Portugal. The project is expected to create about 700 jobs.
TAP brings a broad route network and a mixed financial picture
As of June 2026, TAP operated 101 aircraft and served 93 destinations. Its network spanned four regions:
| Region | Destinations |
|---|---|
| Europe | 52 |
| South and Central America | 16 |
| Africa | 14 |
| North America | 11 |
The airline carried a record 8.2 million passengers in the first half of 2026, a 4.2% increase from a year earlier. Operating revenue grew 4.3% to approximately 2.04 billion euros, but rising fuel costs and other pressures contributed to a net loss of 99.2 million euros.
TAP said it carried 16.7 million passengers in 2025. Its published accounts recorded a net profit of 4.1 million euros ($4.6 million) that year, following four consecutive years in the black.
The sale follows a rescue and a succession of failed attempts
Portugal brought TAP back into state ownership in 2020 as the airline struggled with losses during Covid-19 lockdowns. The following year, the country committed to a deep restructuring in exchange for European Union approval of 3.2 billion euros in public aid.
Earlier efforts to sell stakes in 1998 and 2015 failed, with governments returning the airline to Portuguese state ownership. More recently, Portugal’s Council of Ministers authorized negotiations with the two finalists and asked them for improved final proposals. British Airways parent IAG and Spain’s Iberia had considered bids before leaving the contest.
The selection also fits a broader move toward consolidation among European airlines. Analysts and industry executives have said rising jet fuel prices linked to the war in Iran could push weaker carriers toward larger, better-capitalized groups.
The German carrier already owns ITA Airways and SWISS, among other airlines. It acquired a 41% minority stake in Italy’s ITA and has exercised options to raise that holding to 90% next year. The wider group also includes former state-owned airlines from Switzerland, Austria and Belgium. The French-Dutch rival, meanwhile, has previously secured a majority stake in Scandinavian carrier SAS.
Final contract negotiations and regulatory review still stand between Portugal’s selection and a completed transaction. Montenegro has put full privatization of the airline on a 2028 horizon.
