Air France-KLM has submitted a non-binding offer to acquire a minority stake in TAP Air Portugal. This move positions the Franco-Dutch group as the first formal bidder in the privatization process relaunched by the Portuguese government, which is seeking a strategic partner to bolster the flag carrier’s competitiveness.
A Strategic Pillar in Multi-Hub Expansion
Air France-KLM’s proposal is not merely a financial investment, but a key geographical maneuver. According to Benjamin Smith, the group’s Chief Executive Officer, the integration of TAP would allow Lisbon to be established as the group’s sole hub in Southern Europe.
- Transatlantic Connectivity: TAP’s primary strength lies in its lucrative slots connecting Lisbon with Brazil, Portuguese-speaking African nations, and the United States.
- National Development: Beyond strengthening operations in the capital, the group aims to develop connectivity in other Portuguese cities, including Porto.
- Operational Synergy: Smith emphasized that the airline fits naturally into the corporation’s multi-hub strategy.
Privatization Process Details
In July, the Portuguese government reactivated the sale plan, which initially contemplates the divestment of a 44.9% stake to a strategic partner, with an additional 5% reserved for the airline’s employees.
Under the current decree, the State reserves the option to subsequently sell the remaining 50.1% to the buyer of this initial minority stake. Although Air France-KLM is the first to officially make a move, it faces competition from other industry giants such as International Airlines Group (IAG)—owner of British Airways and Iberia—and the German Lufthansa Group.
TAP Air Portugal’s Financial and Operational Status
Despite the market interest it attracts, the airline’s recent financial results show a contrasting outlook:
- Passenger Traffic: In 2025, the airline transported 16.9 million passengers, representing a 3.4% increase compared to the previous year.
- Fleet: The company currently operates a fleet of 102 aircraft.
- Economic Results: During the first nine months of 2025, TAP’s profits dropped by 35.2%, falling to 55.2 million euros.
- Revenue: Despite the decline in earnings, revenue experienced a slight uptick of 0.5%, reaching approximately 3.3 billion euros.
Next Steps in the Tender Process
Following the receipt of this initial offer, the state holding company Parpublica, tasked with managing the process, has a 30-day window to prepare a detailed report on the merits of each proposal.
Once evaluated, the government will select the most suitable non-binding offers and invite bidders to submit binding proposals within a 90-day period. This timeline will be decisive in determining whether Air France-KLM succeeds in consolidating its dominance on South Atlantic routes via the Lisbon hub.
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