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After months of rumors and indiscretions, the Portuguese government decides to put up for sale the majority of Tap Air Portugal, the national carrier seen by insiders as a “rival” of Ita Airways in the process of consolidating European skies. During the council of ministers in Lisbon the “executive approved the decree law which starts the process of re-privatization of TAP”, commented Finance Minister Fernando Medina at the press conference. “At least 51% of the company’s capital will be sold – he clarified -, while 5% will remain in the hands of the employees”.
PlanThe sale should be completed in 2024 and the local government has not provided a valuation of the carrier which during the pandemic received 3.2 billion euros in public aid – with authorization from the European Commission – as part of a restructuring plan that requires a series of sacrifices and surrenders. Among the elements that will be evaluated at the time of the tender – explained Medina – there will also be the maintenance of the hub in Lisbon, investments, hiring and a credible expansion plan.
The contendersAccording to analysts, three European giants are interested: Iag (holding of British Airways, Iberia, Vueling), the Lufthansa group and Air France-KLM. “We are interested in the proposed sale of a stake in Tap,” commented a Lufthansa spokesperson. «The two companies would complement each other very well, in particular thanks to the Tap route network to and from South America». “We will have to study the privatization process and carefully consider the details, but we feel optimistic and believe that TAP can become another success story within IAG,” said Luis Gallego, CEO of the holding.
StrategyBut the interest of Lufthansa and Iag appears to experts to be a way to raise the price. Although for the Germans it could be “plan B” in case the negotiations for Ita go badly. In pole position – according to what we learn from Portuguese sources – is Air France-KLM not only because it would have fewer problems in terms of competition, but also because Iag is already dealing with the Air Europa dossier (the purchase of which is not has not yet been notified to the EU Antitrust) while Lufthansa is involved in Ita Airways (in this case too, notification of the operation is awaited in Brussels).
The numbersIn 2022 Tap transported almost 14 million passengers and after more than four years it returned to making profits (65.6 million euros last year) against 3.5 billion euros in revenues. The company has around 11 thousand employees, while the fleet is made up of 84 planes with the “mother” company and another 23 with Tap Express/Portugalia, the regional subsidiary, according to the data provided to the Courier by the specialized platform Ch-Aviation. This is the third time that the privatization of Tap has been attempted, which in the meantime has suffered from excessive political interventionism and friction with the unions.
The cause of the former CEOIn the first half of 2023, according to the documents filed, Tap recorded 22.9 million euros in profits, 1.9 billion in revenues and 7.6 million passengers. In short, the carrier continues its positive streak. However, the causes also remain in the background, one above all being that of the former CEO Christine Ourmières-Widener who was fired through a press conference by the public shareholder. The manager, who in the meantime ended up at the helm of the French company French Bee, has sued the Portuguese government and is asking for 5.9 million in compensation.
The Ita Airways dossierAs for the future of Ita Airways, the parties involved (the Treasury, the Italian company and Lufthansa) are answering the last of the hundred questions from Brussels, according to what the Corriere has learned. The notification of the investment – which initially sees the German entry with a 41% share – is now expected in October. But it is a dossier that cannot fail to take into account the privatization of Tap, the second file on the desk of Carsten Spohr, the CEO of Lufthansa.
