Portugal is initiating the sale of its national airline, TAP Air Portugal, for the second time in a decade. The Portuguese government aims to divest a minimum of 51% of the airline’s shares to an investor while allocating 5% to the company’s employees.
Fernando Medina, the country’s Minister of Finance, clarified that the 51% stake is the initial target, with the possibility of selling a higher percentage, potentially up to 100%, to be determined later in the process. He was quoted by local media as saying, “The exact percentage will be determined in subsequent stages.”
The government’s objective in this sale is to facilitate the growth of TAP Air Portugal, its Lisbon hub, investment, and employment within the aviation sector. This move also aims to foster the expansion of point-to-point national airport operations and influence the company’s share price.
Portugal’s Minister of Infrastructure, João Galamba, mentioned that TAP’s performance has exceeded the expectations outlined in its restructuring plan. He stated, “TAP is experiencing a positive phase, with results far surpassing our previous forecasts. We anticipate even better results in 2023.”
During the first half of 2023, TAP reported robust performance in its crucial long-haul markets and achieved a record net income of €23 million ($25.1 million). This marks a significant improvement from the previous year when the airline reported a net loss of €202.1 million ($220.7 million).
TAP Air Portugal has garnered the interest of three major European airline groups: Air France-KLM, Lufthansa, and the International Airlines Group (IAG), which is the parent company of British Airways. TAP Air Portugal holds a substantial and profitable presence in various African and transatlantic markets, particularly in Brazil.
This marks the second privatization of the Portuguese flag carrier TAP Air Portugal within a decade. In 2015, a consortium of private investors led by American airline entrepreneur David Neeleman acquired a 45% stake in TAP Air Portugal, gaining effective control of the airline’s management.
However, in July 2020, TAP returned to majority public ownership when Neeleman sold his 22.5% stake back to the government. This transaction followed a €1.35 billion government rescue package prompted by the COVID-19 pandemic.
The new privatization process is anticipated to conclude in 2024.