Lufthansa Wins Out In TAP Bidding War

Portugal’s government has chosen Lufthansa as the successful bidder to buy an initial minority stake in flag carrier TAP Air Portugal, in a move the German airline group said would allow it to support TAP’s growth and sustainably strengthen Portugal’s connectivity, particularly with North and Latin America.

The move rules the other contender, Air France-KLM, out of the privatization process.

“After evaluating the proposals, the government has decided on the Lufthansa Group, whose financial offer is 16% higher than the competing bid and carries a lower level of uncertainty,” Portuguese public broadcaster RTP reported Prime Minister Luís Montenegro as saying, following a council of ministers meeting Oct. 14.

As part of the bidding process, Air France-KLM and Lufthansa Group had submitted improved final offers for a stake in the airline at the beginning of October.

TAP is an attractive investment target for European network carriers because of its strategic position in southern Europe and its strong presence on routes to South America, particularly Brazil.

During the long-running privatization process, the Portuguese government has made it clear that the successful bidder should be willing to invest in TAP and help it expand key strategic routes as well as grow its network—not only in the Lisbon hub, but in other regional airports in Portugal, too.

Lufthansa Group CEO Carsten Spohr hailed TAP as “a strong and profitable airline, our long-standing partner in Star Alliance, and internationally successful as a leading carrier on South Atlantic routes.” The decision, he said, “allows us to consistently pursue our internationalization strategy and sustainably strengthen our position in the South Atlantic market.”

Spohr added: “We look forward to a shared future with TAP Air Portugal and to continuing our constructive cooperation with the government in Lisbon.”

The German group also said it welcomed the Portuguese government’s announcement to initiate the process for the full privatization of TAP Air Portugal. “Previous acquisitions have shown that a majority stake creates additional benefits for all parties involved,” Lufthansa said.

Lufthansa Group, which bought into ITA Airways in 2025, is in the process of finalizing the increase of its ITA stake. It has offered a purchase price of €1.025 billion ($1.1 billion) for the 44.9% stake. This amount could increase to up to €1.2 billion for the acquisition of a 49.9% stake, due to up to 5% of shares initially offered to employees as well as a ticking fee.

Lufthansa, the Portuguese government, and state holding company Parpública are finalizing the transaction documents and expect to complete and sign the stake acquisition agreements shortly, Lufthansa said, noting that completion of the purchase remains subject to approval by the relevant authorities.

The deal will have to be approved by the European Commission (EC), and that could be a long process. An EC spokesperson said the deal had not been formally presented. “If a transaction constitutes a merger and has an EU dimension, it is always up to the companies to notify the commission,” the spokesperson added.

Air France-KLM, which is separately in the process of increasing its Scandinavian Airlines (SAS) stake to a majority one, had hoped Lisbon would become the group’s exclusive southern hub and had also wanted to increase connectivity for Portugal with the involvement of its North Atlantic joint venture partners, Delta Air Lines and Virgin Atlantic.

An Air France-KLM spokesperson said the airline group had taken note of the Portuguese government’s decision. “If the group is, naturally, disappointed not to have been selected, it wishes to acknowledge the constructive dialogue that took place throughout the process,” the spokesperson said. “Air France-KLM will continue to connect Portugal to the rest of the world via its hubs and bases, and will examine all options that would allow it to strengthen its presence in the country, as well as to and from South America.”

Lisbon is the largest European gateway on the overall Europe-Brazil market, according to OAG Schedules Analyzer data, with 1.54 million seats this winter, representing 31.4% of Europe-Brazil capacity. Madrid ranks second with 753,300 seats and a 15.4% share, followed by Paris Charles de Gaulle with 524,900 seats. According to OAG data, TAP will offer about 8.49 million seats in winter 2026-27, up 5.3% year on year.

Overall scheduled capacity on the Europe-Brazil market is set to rise by 8.7% to 4.89 million two-way seats this winter, and while TAP has slipped into second place behind LATAM, its overall share remains high at 23.1%.

Lufthansa Group, including ITA, has a 13% share of Europe-Brazil capacity.