The Portuguese government has selected Germany’s Lufthansa Group to acquire a 44.9 percent stake in TAP Air Portugal for 1.025 billion euros, potentially increasing to 49.9 percent for up to 1.201 billion euros, beating a competing offer from Air France-KLM and setting a target to complete the transaction by early 2028.
Prime Minister Luís Montenegro announced the decision after the Cabinet reviewed final binding bids, marking a decisive turning point for the state-owned flag carrier. The winning proposal values the stake at up to 1.201 billion euros, according to figures reported by business daily ECO.
Having assessed the proposals, the Government’s decision falls on the Lufthansa group, according to Luís Montenegro, Prime Minister of Portugal, on 14 October 2026. A rival proposal worth €1.038 billion was presented by Air France-KLM, featuring an extra €100 million contingent upon TAP hitting specific financial goals by 2028, but doubts regarding those benchmarks counted against the Franco-Dutch consortium.
Infrastructure Minister Miguel Pinto Luz pointed out that the official choice relied not merely on the financial worth of the bid, but additionally on safeguarding Portugal’s and TAP’s broader strategic priorities. For the roughly 1.4 million Americans of Portuguese descent, particularly those residing in New Jersey, Massachusetts, Rhode Island, New York, California and additional states, SATA and TAP have historically served as a vital link to Portugal. For Portuguese communities in the United States, Canada, and beyond, changes at TAP and Azores Airlines carry particular significance.
The acquisition agreement structures the investment into an initial 44.9 percent stake for 1.025 billion euros, with an additional portion covering a five percent employee allocation that could bring the total investment to 1.2 billion euros once finalized. Lufthansa intends to finance the transaction entirely from available cash without issuing new equity. The overall financial package reaches 1.201 billion euros by factoring in another €58 million tied to the divestment of SPdH and Cateringpor, two aviation services firms.
Strategic Expansion Across the South Atlantic and Brazil
For the German aviation group, the transaction fits squarely into an ongoing international expansion strategy. Carsten Spohr emphasized that TAP serves as a primary gateway to Latin America, particularly Brazil, where the Portuguese carrier maintains an extensive network of profitable routes.
Key Highlights: Lufthansa Outbids Air France-KLM for TAP Air PortugalLufthansa wins the bidding race: Portugal selected Lufthansa Group over Air France-KLM to acquire a minority stake in TAP Air Portugal on October 14, 2026.€1.201 billion transaction: The proposed deal… pic.twitter.com/s37iO0XQ0P
TAP Air Portugal is a strong and profitable airline, our long-standing partner in Star Alliance and internationally successful as a leading carrier on South Atlantic routes.
Carsten Spohr, Lufthansa Group
TAP will become the latest network carrier under the corporate umbrella. TAP already cooperates with Lufthansa and other Star Alliance members, including United Airlines and Air Canada. Operations run by United Airlines and Air Canada—both of which maintain joint ventures with Lufthansa—were also factored into consideration for North American paths.
Fleet Commitments and Infrastructure Pledges in Lisbon
Beyond the direct financial consideration, the successful bid incorporates specific investment obligations regarding fleet modernization and domestic infrastructure. Lufthansa committed to expanding TAP’s operating capacity from its current fleet of 101 aircraft to 117 by 2035, and ultimately to 130 aircraft following the future opening of Lisbon’s new airport. The plan also leaves open the potential transfer of up to eight Airbus A350-900 aircraft after 2030.
The package further includes establishing a civil and military aviation training school at Tancos Air Base. Regional officials in Madeira and the Azores confirmed that existing territorial air links and regional connectivity are fully safeguarded under the binding terms of the privatization agreement.
Regulatory Hurdles and a Potential Future Full Takeover
The transaction now moves to the European Commission’s Directorate-General for Competition for an extensive antitrust review. Finance Minister Joaquim Miranda Sarmento indicated during the presentation of the 2027 state budget that the review process could take between 18 and 24 months, pushing the expected closing date into 2028. State holding entity Parpública and the Portuguese administration will work with the German carrier to conclude legal documents in the months ahead, as noted by the group.
Lufthansa has also outlined a second phase of privatization, which could see the German airline acquire the remaining 50.1 percent stake through an 863 million euro cash offer paired with a share swap valued at approximately 488 million euros.
TAP would add another national airline and another major European hub. The group reported approximately €39.6 billion in revenue and more than 103,000 employees in 2025. This expansion is transforming Lufthansa from a German airline company into a multinational European aviation platform, bringing economies of scale, stronger purchasing power, shared technology, and opportunities to optimize aircraft deployment.
An additional bid was submitted by Lufthansa covering a subsequent stage: an €863 million layout for the remaining 50.1% stake in TAP, alongside a 5% interest in the Lufthansa Group valued at €488 million, although authorities in Lisbon have yet to finalize any choice regarding the sale of this remainder. Joaquim Miranda Sarmento stated that the government would decide on the winner before the European Commission process begins, expecting the deal to close in 2028, at which point Lufthansa will actually own its stake and TAP employees will get the chance to buy their 5%.
Travelers flying with Lufthansa Airlines, SWISS, Austrian Airlines, Brussels Airlines, and Eurowings can access the various offerings provided through the Passenger Airlines division. Meanwhile, the Regional Government of the Azores is advancing a separate privatization process for SATA Azores Airlines, raising questions about the future of direct air connections between the archipelago and North America.
Enhanced flight frequency options, deeper alignment alongside Star Alliance partners Air Canada and United Airlines, and potential upgrades to scheduling and aircraft capacity represent ways in which Lufthansa’s capital injection might improve connectivity. However, the proposed TAP acquisition does not guarantee additional nonstop flights or lower fares, leaving travelers to watch whether the new ownership structure produces benefits.