After months of negotiation and speculation, the Portuguese government have announced that the Lufthansa Group will take a minority stake in TAP Air Portugal.

The news was confirmed by the Portuguese Prime Minister Luís Montenegro, who said that Lufthansa Group won out over rival bidders Air France-KLM because their offer was 16% higher and ‘carries a lower degree of uncertainty’.

As reported by Euronews, Montenegro said privatising the national carrier in this way would bring in €1.201 billion euros in its first phase and thousands more jobs thereafter. He added:

This is an offer that gives the airline a total valuation of €2.552 billion. A figure far above the independent valuations put forward a few years ago or even just a few months ago.

The Portuguese state will retain a 50.1% share in the carrier. Miguel Pinto Luz, the minister for Infrastructure and Housing, said that the deal would bring TAP’s fleet to 117 aircraft by 2035, before scaling to 130. The investment also encompasses new projects in Porto’s Francisco Sá Carneiro Airport and Faro airport, as well as airports in Portugal’s Autonomous Regions.

TAP CEO Luis Rodrigues was speaking at World Aviation Festival’s Star Alliance panel shortly after the news broke. Sitting alongside Joerg Ebhart, CEO of TAP’s new sister airline ITA Airways, Rodrigues said:

We all know [the privatisation process] was a difficult challenge, but as our government says today the process has not concluded, but come to a significant next step.

Portugal’s finance minister, Joaquim Miranda Sarmento, has previously said that the privatisation would not be fully complete until 2028.

By joining Lufthansa Group, TAP remains a member of Star Alliance, whereas agreeing to the offer from Air France-KLM would have necessitated switching allegiances to rivals SkyTeam.

AF-KLM CEO Benjamin Smith publicly posted a five-point plan outlining his vision for TAP earlier in October, stating that his organisation could transform TAP into a ‘European champion’. However, the Portuguese government have ultimately decided that their offer of cash plus assets was less appealing than Lufthansa’s strategic vision and higher offer.

TAP have been struggling financially since renationalisation in 2015, while high fuel costs have added new financial pressures: the carrier reported losses of nearly €100 million in the first half of 2026. However, the airline’s route network across Europe, Africa, and South America represents a highly prized asset whose full potential Lufthansa Group will hope to realise.

TAP Air Portugal are the Official Alliance Partner of World Aviation Festival.

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