Lisbon’s choice gives the German group a gateway to Brazil and the Atlantic, and hands Air France-KLM a setback in Europe’s airline consolidation race.
The TAP Air Portugal stake has gone to Lufthansa, after Portugal’s government announced following Wednesday’s cabinet meeting that the German group was chosen to buy 44.9% of the airline. The decision beats rival bidder Air France-KLM and completes the first phase of TAP’s privatisation, as Euronews reported. Prime Minister Luís Montenegro said the process was run with strict respect for competition and full transparency toward the Portuguese public. The deal still needs regulatory approval before it can be completed.
Who Gets the TAP Air Portugal Stake
Montenegro said Lufthansa’s financial offer was 16% higher than the rival proposal and carried a lower degree of uncertainty. The first phase brings in €1.201 billion and values the airline at €2.552 billion in total. He described that valuation as far above the independent estimates put forward a few years ago, or even a few months ago.
The state keeps a majority stake of 50.1%, while Lufthansa will be responsible for executive and operational management. Portuguese law allows the government to sell up to 49.9% of TAP. Of that share, 44.9% is set aside for a strategic investor and up to 5% is reserved for employees.
Why Lufthansa Won the TAP Air Portugal Stake
The government said its decision rested not only on price but also on each bidder’s industrial plan, including its strategy for growth and long-term sustainability. Portuguese broadcaster SIC reported that Lufthansa offered to pay entirely in cash and pointed to its stronger financial position as an advantage, according to NL Times. Air France-KLM’s proposal reportedly combined cash with shares in its own group.
On fleet plans, Infrastructure Minister Miguel Pinto Luz highlighted an expansion to 117 aircraft by 2035 and 130 aircraft after 2035. Montenegro also stressed the government’s ambitious strategy for the aviation sector, particularly airport infrastructure. These commitments weighed alongside price in Lisbon’s final choice.
What Air France-KLM Lost in the Bid
Air France-KLM had made a strong strategic case for itself. According to Skift, it promised to make Lisbon its sole Southern European hub and had public backing from Delta CEO Ed Bastian, who committed to begin codeshare and loyalty talks if the Franco-Dutch group won. Its September offer covered a stake of up to 49.9% and included plans for passenger services, cargo, loyalty programmes and aircraft maintenance.
The failed bid for the TAP Air Portugal stake is a competitive setback for Air France-KLM’s European expansion strategy. TAP would have given the group a new foothold in Southern Europe and stronger access to the South Atlantic. Instead, that opportunity now goes to a direct rival.
Why the TAP Air Portugal Stake Matters
TAP’s main attraction is its valuable landing slots connecting Lisbon with Brazil, Portuguese-speaking Africa and the United States. These routes support Portugal’s diaspora ties, tourism flows and investment links. Aviation analyst John Strickland said the deal gives Lufthansa an additional hub in a region where its reach has been limited.
Lufthansa already owns Austrian Airlines, ITA Airways and SWISS, among other carriers. TAP was one of Europe’s last unaligned flag carriers, which is why its sale drew such close attention from the industry. For more business coverage, see our latest Business reports.
What Happens Next for the TAP Air Portugal Stake
Choosing a preferred bidder does not complete the sale. Further negotiations, regulatory approvals and a final contract all remain before Lufthansa becomes a TAP shareholder. A second-phase sale of a larger stake may follow in future, but it would require a separate procedure.
The outcome shows how competitive Europe’s airline consolidation has become, with each national carrier that changes hands reshaping the network map. For Lufthansa, TAP adds another route into Latin America and a stronger position in Southwest Europe. For Air France-KLM, the loss is a reminder that price, certainty and financial strength can decide a privatisation contest as much as strategy does.