Privatization of TAP: After all, how long can the process take?

Hnew details on TAP’s privatisation timetable: Finance Minister Joaquim Miranda Sarmento, said on thursday that the Government will take a decision on the winner of TAP privatisation this month and which process with the European Commission may take 18 to 24 months.

“The government will, during this month, make a decision about who won [...] and then a process begins with the European Commission. It should be noted that this process may take 18 to 24 months“, said finance minister Miranda Sarmento, in response to journalists, at the press conference presenting the State Budget for 2027 (OE2027), in Lisbon.

Already on the impact of privatization, the ruler explained that this process has only an impact on debt and not on the budgetary balance.

Accordingly, and having regard to the time-limit of the proceedings with Brussels, the impact should only be felt in 2028.

What's the status? 

Last week, Air France-KLM and Lufthansa presented the final and improved binding proposals for the acquisition of 44.9% of TAP's capital.

As the Minister of Infrastructure and Housing, Miguel Pinto Luz, explained at the time, the Portuguese Government must make the final decision within 15 days, that is, until next week.

The operation also provides for the reservation of 5% of the capital to the workers, the rest being in the hands of the state, currently the majority shareholder.

In June, the Minister of Infrastructure told Antena 1 that the government planned to choose the winner by September and that the chosen group could assume the co-management of the carrier still in 2026, before the effective entry into the capital, which at the time had estimated for the summer of 2027, after the ‘green light’ of Brussels.

As lawyers had explained to Lusa, any co-management of TAP by the future buyer, before the final authorisation of the European Commission, could violate the competition rules if it allowed influence on the strategic decisions of the company without exception from Brussels.

Air France and Lufthansa await Government decision next week

Aviation groups Air France-KLM and Lufthansa said today they expected a decision next week by the Portuguese Government on the privatisation of the national air carrier TAP, refusing to reveal the content of the proposals.

“ We are waiting for a decision by the Portuguese State and we should meet it next week,” said Air France-KLM group’s executive president, Benjamin Smith, at a press conference in Brussels of the five largest European airlines in the Airlines for Europe (A4E) association.

Also present at the time, Lufthansa Group Executive President Carsten Spohr refused to answer Lusa's question about the content of the proposals or deadlines, merely pointing out the rivalry between the two groups by embracing Benjamin Smith.