Lufthansa Group has won the race for a minority stake in TAP Air Portugal. On Wednesday, 14 October 2026, Portugal's Council of Ministers approved Lufthansa's bid over a rival offer from Air France-KLM, ending a privatisation process that formally began in July 2025. The government valued the transaction at β¬1.201 billion, including a 5% tranche reserved for TAP employees.
What Lufthansa is buying
According to the Portuguese government, as reported by AeroTime and FlightGlobal, Lufthansa Group will take a 44.9% stake in TAP, plus up to a further 5% if employees do not use their right to buy those shares. That brings the possible holding to 49.9%, while the Portuguese state keeps 50.1% and remains the majority shareholder.
Lufthansa will appoint three executive directors. The state will keep five of the nine seats on the board of directors, including the chairman. The government says the deal is expected to close at the beginning of 2028.
Why Lufthansa beat Air France-KLM
The government said the final choice "fell on the financially stronger proposal presented by Lufthansa", which also came with "an ambitious growth plan for TAP and the possibility of new investments in Portugal." It said Lufthansa's offer for up to 49.9% of TAP's share capital was up to 16% higher than the Air France-KLM bid and carried less uncertainty. Reuters, as cited by AeroTime, reported that Lufthansa offered an all-cash deal, while Air France-KLM's proposal mixed cash and shares.
Infrastructure and Housing Minister Miguel Pinto Luz called it "a strategic decision, which, as was our wish, was not confined to price," adding that it would let the state and Portuguese taxpayers "recover a much higher amount than initially expected."
Both groups had handed their final bids to ParpΓΊblica, the state holding company running the sale, on 30 September 2026. International Airlines Group (IAG), the owner of British Airways and Iberia, had considered bidding at one stage but did not submit a final offer.
A possible second step to majority control
Both bidders also submitted proposals for a majority stake, to be offered in a possible second phase. The government says Lufthansa's majority proposal foresees an additional β¬1.35 billion, which would put TAP's total direct valuation at β¬2.55 billion. Preparations for that second phase are due to start shortly.
Commitments to Portugal
The government says joining Lufthansa Group should help TAP grow globally, strengthen its presence in Latin America and at Porto, and expand the fleet to up to 130 aircraft. Lisbon remains the main hub, and the TAP brand, its headquarters and connections to the Madeira and Azores islands are protected as national strategic interests.
TAP is already a Star Alliance partner of Lufthansa and its sister carriers. In the group it will sit alongside Lufthansa, SWISS, Austrian Airlines, Brussels Airlines and ITA Airways, the Italian carrier Lufthansa entered most recently.
TAP's chief executive: "a significantly larger company"
Speaking at the World Aviation Festival in Lisbon shortly before the announcement, TAP chief executive LuΓs Rodrigues told FlightGlobal that under the 10-year plan the airline "looks like a significantly larger company than it is today." He said long-haul flying will keep pointing west, to South and North America, and that TAP will become "a more profitable company inside the group we are going to be in."
Rodrigues also pointed to Lisbon airport as TAP's biggest constraint. "This airport was designed for 10-12 million people. Last year it had 37 million," he said, adding that the city has grown around the field and there is no room to expand. The government chose the Alcochete military airfield in May 2024 as the site for a new Lisbon airport, with opening planned around 2037. "We just need to survive the next 10 years," Rodrigues said.
What it means
The decision gives Lufthansa a foothold on Europe's south-western edge and TAP's long-haul network to South and North America. For Air France-KLM, which had pitched Lisbon as its "unique Southern European hub" and promised new maintenance work in Portugal, it is the loss of one of the last national airlines still up for sale in Western Europe.
Sources: Portuguese government statement via AeroTime and FlightGlobal; Reuters via AeroTime.
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