Lufthansa and Air France-KLM dig in for TAP as Lisbon moves to binding offers

Lufthansa Group and Air France-KLM have reaffirmed their pursuit of a stake in TAP Air Portugal during first-quarter earnings calls, setting up a two-horse race for the Lisbon flag carrier as Portugal advances the privatisation into its binding-offer phase.

Carsten Spohr, chief executive of Lufthansa, told analysts the German group's interest in TAP "remains unchanged", framing the deal as a route to lift the group's share of Latin American traffic relative to Air France-KLM and IAG. "It is not only about TAP but it is about Portugal and Lufthansa Group. There is an aviation strategy behind it," he said.

Air France-KLM chief executive Ben Smith said the way the group views Latin America "has not changed whatsoever", with chief financial officer Steven Zaat telling the same call that intensive due diligence would now begin ahead of a binding offer expected at the end of July or start of August.

TAP's prize is its grip on the Europe to Brazil corridor and a thinner but lucrative African network covering Angola, Mozambique and Cape Verde, traffic that neither rival currently leads.

The Portuguese government cleared both groups through to the final stage in April after IAG, parent of British Airways and Iberia, declined to submit a non-binding offer ahead of the 2 April deadline, having flagged the lack of a path to majority ownership as a deal-breaker. Lisbon is offering only an initial 44.9% strategic stake plus 5% reserved for employees, a structure analysts have valued at around €700 million.

The eventual winner will be bound by a five-year resale ban, with final sign-off expected in August or September. For Brussels, the deal closes TAP's pandemic-era restructuring imposed by the European Commission and tests appetite for further national-carrier consolidation after Lufthansa's ITA Airways acquisition.