Consolidation Pressures Mount as TAP Privatisation Sparks Bidding War

Europe's three dominant airline groups positioned themselves for intensified consolidation battle as Portugal's TAP Air privatisation attracted formal expressions of interest from Lufthansa Group, International Airlines Group, and Air France-KLM ahead of late November submission deadline.

Portuguese government aims to divest 49.9% non-controlling stake in national carrier, comprising 44.9% allocated to major investors valued at approximately €700 million and 5% reserved for TAP employees. President Marcelo Rebelo de Sousa approved privatisation decree August 2025, clearing path for process targeting mid-2026 completion. Formal submission deadline established at 16:59 hours November 22.

TAP's appeal stems from newfound profitability alongside strategic network positioning. Carrier reported €126 million third-quarter profit and €55 million nine-month earnings during 2025, contrasting sharply with historical loss-making operations. Fleet comprising 83 mainline Airbus aircraft plus 19 Embraer regional jets operated 105 routes serving 88 destinations across 31 countries from Lisbon hub. Network strengths include 14 Brazilian destinations, 11 North American points, and extensive Portuguese-speaking African coverage.

Lufthansa Group emphasised 70-year Portuguese operational history, current 280 weekly flights, and over 400 skilled employees in country. CEO Carsten Spohr positioned TAP as "great strategic importance to European aviation industry" whilst highlighting Star Alliance partnership and extensive Portuguese investments. Group recently acquired stakes in Austrian Airlines, Brussels Airlines, Swiss International, and ITA Airways.

IAG confirmed interest whilst noting "several terms would need to be addressed before IAG could propose an investment." British Airways and Iberia parent previously pursued Air Europa acquisition until terminating agreement August 2024 citing "current regulatory environment" following European Commission competition concerns. TAP represents alternative route toward Southern European market consolidation.

Air France-KLM formally expressed intent earlier November week. Successful bid by any group would further consolidate European airline market, accelerating concentration amongst continental majors confronting intensified competition from Gulf carriers and low-cost operators whilst navigating heightened regulatory scrutiny of proposed mergers.