The Portuguese government is exploring the possibility of privatizing TAP Air Portugal, and International Consolidated Airlines Group (IAG) is reportedly interested in acquiring the airline. This comes after IAG’s unsuccessful attempt to take over Spain’s Air Europa due to European Commission concerns about reduced competition.
“Formed in January 2011, IAG is the parent company of British Airways, Iberia, Vueling, Aer Lingus, LEVEL, IAG Loyalty and IAG Cargo. It is a Spanish registered company with shares trading on the London and Spanish stock exchanges. The corporate head office for IAG is in London, UK.” – IAG
IAG was formed from the merger of British Airways and Iberia in 2011 and has since expanded by acquiring other airlines like Vueling. Despite its size in Europe, it remains smaller than major U.S. airlines based on fleet size.
In August 2024, IAG withdrew its proposal to acquire Air Europa after failing to address EU antitrust regulators’ concerns adequately. “EU antitrust regulators had been poised to block the deal after IAG declined to offer additional remedies to address their concerns,” according to Reuters.
Following this setback, speculation arose that IAG might focus on acquiring TAP Air Portugal instead. The Portuguese government is considering selling either a majority or minority stake in TAP but has not confirmed specifics.
“Lufthansa Group has long since had its hat in the ring for any potential stake in TAP that may be made available,” Aero Time reports. However, analysts favor an IAG-led bid as more likely to succeed.
If successful, acquiring TAP would strengthen IAG’s presence across the Atlantic and enhance connections with Brazil—a key market due to cultural ties with Portugal.
Uncertainty surrounds whether TAP will be sold at all due to political changes in Portugal affecting privatization plans. A sale of less than 20% could bypass EU regulatory scrutiny.
“The European Commission has approved…the proposed acquisition of joint control of ITA Airways (‘ITA’) by Deutsche Lufthansa AG (‘Lufthansa’) and the Italian Ministry of Economy and Finance (‘MEF’). The approval is conditional upon full compliance with the remedies offered by Lufthansa and MEF.” – European Commission
TAP Air Portugal operates from Lisbon Airport with flights to around 90 destinations using a fleet predominantly composed of Airbus aircraft. Founded as a government-owned airline in 1945, it has undergone several privatizations and nationalizations over its history.
The outcome depends on whether the Portuguese government proceeds with selling TAP fully or partially and if IAG can secure approval from EU authorities for such an acquisition.
