The Portuguese government has chosen Lufthansa to acquire a significant minority stake in TAP Air Portugal, marking a major shift in the ownership of the national carrier. The German airline will purchase 44.9 percent of TAP for just over €1 billion, with the possibility of increasing its stake to 49.9 percent for €1.2 billion depending on employee share purchases. The deal, which is expected to finalize in 2028, positions TAP as part of one of Europe’s largest airline groups.

Prime Minister Luís Montenegro confirmed that Lufthansa’s offer was 16 percent higher than the rival bid from Air France-KLM, which had also competed to become TAP’s strategic partner. He highlighted that Lufthansa’s offer values TAP at approximately €2.55 billion, a figure significantly above previous assessments that placed the airline’s worth between €700 million and €1 billion in 2022. The Portuguese government had invited best and final bids from both airlines after extended negotiations failed to separate the proposals.

In addition to the higher valuation, the government noted that Lufthansa proposed investment in a training center, ensured TAP’s continued participation in the Star Alliance network, and offered a governance structure deemed more favorable. These factors contributed to the preference for Lufthansa’s bid.

The deal comes after TAP was renationalized in 2020 amid substantial financial setbacks caused by the COVID-19 pandemic. The state ownership faced challenges as the airline worked to recover in a disrupted global aviation market. Attending the World Aviation Festival in Lisbon, TAP Chief Executive Luís Rodrigues expressed optimism about the partnership, stating that joining Lufthansa’s group would provide access to broader resources and better commercial terms.

Portugal’s government also indicated a willingness to consider selling its entire stake in TAP by 2028, with Lufthansa having put forward an offer of €1.35 billion for the remaining shares not currently on the table. This suggests that the privatization of TAP could extend beyond the initial minority stake sale.

For the fiscal year 2025, TAP reported earnings before interest, tax, depreciation, and amortization (EBITDA) of €742.9 million on revenues of €4.3 billion, reflecting a significant recovery from pandemic-related losses.

Lufthansa’s acquisition of TAP represents a consolidation step in the European airline industry, where Lufthansa already holds controlling shares in several other carriers, including Austrian Airlines, Brussels Airlines, ITA Airways, and SWISS. With this addition, TAP will become integrated into one of the continent’s largest aviation networks.