Portugal’s government plans to sell a controlling stake of at least 51% in state-owned airline TAP, it said on Thursday, after the cabinet approved the privatisation process with a view to develop the national aviation sector.
“The content of the decree contemplates objectives for TAP growth, national hub growth, growth and employment within the aviation sector, better utilisation of national airports and pricing,” Finance Minister Fernando Medina told reporters.
TAP employees will get another 5%, while the stake to be left in state hands is yet to be determined.
Medina said bidders must be sector players with relevant scale, not investors of a strictly financial nature.
The airline’s privatisation has already attracted interest from Lufthansa, Air France-KLM and British Airways owner IAG.
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IAG CEO Luis Gallego said on Wednesday that TAP would fit right into the group’s profile, but the company still needed to see the conditions of the sale.
“There are airlines interested and their interest is public, which we celebrate as a positive sign for the success of this operation,” Medina said, pointing to TAP’s “privileged connections” with the Portuguese-speaking world, including countries such as Brazil, Angola and Mozambique.
The government plans to approve the complete privatization dossier with the conditions and requirements by the end of the year, Medina said, and the process should be completed next year.
The company, which is undergoing restructuring as part of a bailout approved by Brussels, posted a net profit of EUR 23 million in the first half, compared with a loss of EUR 202 million a year earlier, thanks to strong revenue growth, and expects to post more positive results this year.
The CEO of Ryanair’s main carrier DAC, Eddie Wilson, told Reuters on the sidelines of the World Aviation Festival in Lisbon on Thursday that the privatization of TAP “is the right thing to do,” and considered the airline “a natural fit for IAG.”
“And I think they would also have a better chance of developing the Lisbon hub. IAG would understand TAP’s business much better than Air France-KLM and Lufthansa, whose natural instinct is always to attract traffic to their hubs,” he said.
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