Lufthansa wins bid to take stake in Portuguese airline TAP

German aviation giant Lufthansa on Wednesday won the bid to acquire a 44.9% stake in Portuguese state-owned airline TAP, defeating its Franco-Dutch rival Air France-KLM.

Portuguese Prime Minister Luís Montenegro announced the decision, saying Lufthansa submitted a bid of €1.2 billion ($1.3 billion) for the shares.

Air France-KLM had also sought a minority stake in the Portuguese carrier, having previously been awarded a majority stake in the Scandinavian airline SAS.

Following the planned partial privatization, the Portuguese state will retain a majority stake in TAP, which has a fleet of more than 100 aircraft and around 9,400 employees.

The transaction is not expected to be finalized until 2028, with approval required from the European Commission.

The decision is a major victory for Lufthansa, which has set its sights on expanding in southern Europe.

The German group currently holds a minority stake in the Italian company ITA Airways, but it has already exercised its option to increase its stake to 90%. The transaction is expected to be completed at the start of next year.

The Lufthansa Group also includes the former national carriers of Switzerland, Austria and Belgium.

Montenegro: Lufthansa bid 16% higher

Montenegro said Lufthansa's offer was 16% higher than that of its competitor and involved fewer uncertainties, making it "the best choice for the future of the company and the best way to safeguard the national interest."

Through its integration into Lufthansa, TAP will become part of one of Europe's largest airline groups, and the fourth-largest in the world in terms of turnover.

Lufthansa has committed to expanding TAP's fleet to 117 aircraft by 2035 and to 130 aircraft following the completion of the new Lisbon airport, while the fleet of the regional airline Portugália is also to be modernized.

TAP in good position

Industry observers see TAP as an airline with strong growth potential.

After the airline was privatized in 2015, the Portuguese government regained control during the Covid-19 pandemic and injected around €3.2 billion into the company.

TAP operates a relatively young Airbus fleet of just over 100 aircraft and posted a profit for the fourth consecutive year in 2025.

However, the profit was modest, at just €4.1 million on revenue of €4.3 billion, while high jet fuel prices pushed the airline to a loss of €99.2 million in the first half of 2026.

While TAP's home market in Portugal may appear comparatively small, the airline's true significance lies in its extensive network to South America's largest country, Brazil.

"From a strategic perspective, TAP is a very attractive candidate for Lufthansa," said aviation expert Jürgen Krumtünger of the consultancy firm Prologis. In Lisbon, the Portuguese airline offers an established hub, numerous take-off and landing rights, and a strong market position in South America.