IAG Pledges Investment in TAP and Strengthening Lisbon Hub if It Wins Privatization Process
International Airlines Group (IAG), parent company of British Airways and Iberia, has confirmed its interest in acquiring a stake in TAP Air Portugal as part of the privatization process recently reactivated by the Portuguese government. In a statement to Reuters, an IAG spokesperson said the company “welcomes the privatization process” and believes TAP could “flourish as part of IAG’s distinctive and proven model,” which focuses on investing in airlines and expanding strategic hubs.
Privatization Process Details
The Portuguese government aims to sell 44.9% of TAP to an airline capable of providing global scale and competitiveness, with an additional 5% offered to the company’s employees. This long-delayed operation was relaunched last week and has attracted interest from Europe’s three major airline groups: IAG, Lufthansa, and Air France-KLM. All three have held talks with the Portuguese government over the past year.
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Lisbon as a Key Asset
TAP owns highly valued assets, including its network of connections from Lisbon to Brazil, Portuguese-speaking African countries, and the United States. The Portuguese government has emphasized its intention to maintain and expand the capital’s hub, which it considers strategic for the country’s connectivity.
Criticism and Precedents
Some analysts have raised concerns about a potential acquisition by IAG, citing the proximity between Lisbon’s hub and Iberia’s operational base in Madrid. They fear that, in the long term, routes could be diverted to the Spanish capital, potentially diminishing the Portuguese airport’s relevance.
However, IAG points to the case of Aer Lingus as proof that this risk is not inevitable. The Irish airline, integrated into the group since 2015, has doubled its long-haul flight capacity despite its proximity to British Airways’ London hub. “It’s a compelling example of what could be achieved with TAP,” the spokesperson stated.
A Strategic Decision at Stake
The competition for a stake in TAP promises to be fierce, and the outcome could redefine the aviation landscape in the Iberian and transatlantic regions. For IAG, the operation represents a growth opportunity and a bet on strengthening its hub network without sacrificing the identity or role of each airline in its portfolio.
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