Lufthansa Selected to Acquire 44.9 Percent Stake in TAP Air Portugal for €1.2 Billion

On October 14, 2026, the Portuguese cabinet in Lisbon selected Deutsche Lufthansa AG to acquire a 44.9 percent stake in TAP Air Portugal. The €1.2 billion transaction concludes a year-long bidding process, granting the German aviation group executive and operational control over the state-owned flag carrier.[1][2]

Lufthansa's €1.201 billion offer valued the airline at approximately €2.55 billion, outbidding a rival €1.038 billion proposal from Air France-KLM by 16 percent. The Portuguese state will retain a 50.1 percent majority, while 5 percent of the shares are reserved for TAP's workforce of more than 9,000 employees. If workers decline their allocation, Lufthansa's stake could automatically increase to 49.9 percent.[1][2][6]

For Lufthansa, the acquisition secures a highly coveted network connecting Europe to Latin America and Africa. TAP currently operates a fleet of more than 90 aircraft flying to over 90 destinations, including 16 in Central and South America and 14 across the African continent. Its routes to Brazil are considered particularly lucrative within the industry.[1][2]

The integration keeps TAP within the Star Alliance network, preventing a defection to the SkyTeam alliance that an Air France-KLM victory would have triggered. Lufthansa Group CEO Carsten Spohr noted that the deal allows the company to "consistently pursue our internationalization strategy and sustainably strengthen our position in the South Atlantic market."[2][5]

The defeat represents a significant setback for Air France-KLM, which had aggressively pursued TAP to bolster its own South American network. The Franco-Dutch group had offered €1.038 billion for the minority stake, but the Portuguese cabinet ultimately deemed Lufthansa's higher offer to be the more secure path forward for the airline.[2][6]

Under the agreement, Lufthansa will assume executive management of TAP while preserving its distinct national brand and keeping its primary hub in Lisbon. Industry observers expect the German group to gradually align the Portuguese carrier's fleet procurement requirements with its own standardized operating models, generating economies of scale across maintenance, ground operations, and crew training.[2]

The sale represents a critical off-ramp for the Portuguese government, which has struggled to stabilize the airline's ownership structure for decades. Previous privatization attempts collapsed in 1998 and 2015, and the carrier was ultimately renationalized in 2020 after absorbing €3.2 billion in public aid to survive the COVID-19 pandemic.[1][3]

While TAP carried 16.7 million passengers and posted a modest net profit of €4.1 million in 2025, its financial footing remains fragile. The airline reported a first-half loss of €99 million in 2026, underscoring the government's argument that the carrier requires the capital backing of a larger aviation conglomerate to secure its long-term viability.[1][3]

"We are guaranteeing TAP's growth — growth in its fleet, passengers, destinations and connections, as well as investment not only in TAP but across Portugal's aviation sector," Portuguese Prime Minister Luís Montenegro stated following the decision. He framed the selection as the most secure path to protect the national interest while relieving the state's financial burden.[2]

The TAP acquisition accelerates a broader consolidation wave sweeping through the European aviation sector. Legacy carriers are increasingly absorbing smaller national airlines to build massive multi-hub networks. Lufthansa itself recently acquired a 41 percent stake in Italy's ITA Airways and secured a 10 percent share in the Latvian carrier AirBaltic.[5]

To sweeten the acquisition, Lufthansa committed to expanding its broader industrial footprint within Portugal beyond passenger flights. A new Lufthansa Technik maintenance facility is currently under construction in Santa Maria da Feira, near the northern city of Porto, which the company projects will create more than 1,000 direct aviation jobs by 2030.[4]

The transaction now faces intense scrutiny from European Union antitrust regulators, who have grown increasingly wary of market concentration. Regulators previously forced Lufthansa to surrender lucrative landing slots in Milan and Rome before approving the ITA Airways deal, and similar concessions at Lisbon's congested Humberto Delgado Airport are highly likely.[1][5]

If the initial acquisition clears regulatory hurdles, the Portuguese government has signaled its intent to exit the airline business entirely. Officials noted that a second phase of privatization could conclude by early 2028, potentially allowing Lufthansa to assume full majority ownership as the state steps down to become a passive minority shareholder.[1][6]