Privateization of TAP: Government chooses winner this Wednesday

O Government will announce the winner in the race to the privatization of TAP this Wednesday, after approving the decision in Council of Ministers. The decision is between Air France-KLM or Lufthansa. 

The news, for example, was advanced by the Economic Journal, which noted that the announcement to the country should be made early this afternoon. 

It had already been revealed that the aviation groups Air France-KLM and Lufthansa expected a decision this week by the Portuguese Government on the privatisation of the national air carrier TAP.

“ We are waiting for a decision by the Portuguese State and we should know it next week,” said Air France-KLM group executive president Benjamin Smith on Thursday at a press conference in Brussels of the five largest European airlines, part of 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.

What do you know so far?

Air France-KLM and Lufthansa have submitted final binding and improved proposals for the acquisition of 44.9% of TAP's capital, and the decision now falls to the Portuguese Government.

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.

Privatisation is taking place at a time when European airlines are warning of the increasing pressure on their competitiveness, particularly due to energy costs, airport charges and European regulation, while they are calling for greater airport capacity to monitor demand growth. 

The privatisation process may take up to 24 months

The Finance Minister recalled that this month the government will take a decision on who won the privatisation of TAP and that a process will then be initiated with the European Commission, which may take between 18 and 24 months.

“The Government will, during this month, take a decision on who won [...] and then initiate a process 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.

On the impact of privatisation, the governor explained that this process has only an impact on debt rather than on the budgetary balance. Thus, and in view of the deadline of the procedure with Brussels, the impact should only be felt in 2028.