Lufthansa Just Outbid Air France-KLM for a Slice of Portugal’s Airline

Portugal’s government has chosen Lufthansa to buy a 44.9 percent stake in TAP Air Portugal for about €1.2 billion, ending a long and repeatedly delayed privatization contest. Air France-KLM lost out after both bidders submitted improved final offers in late September. Prime Minister Luís Montenegro said Lufthansa’s bid was 16 percent higher.

Price was not the only factor. Lisbon weighed each bidder’s industrial plan, and Lufthansa committed to add 117 aircraft by 2035 and 130 more after 2035, when Lisbon’s new airport is expected to open. It also agreed to grow TAP’s connectivity beyond Lisbon, to Porto, Faro, the Azores and Madeira. Reports also describe Lufthansa’s offer as all cash.

The state keeps 50.1 percent, and employees can buy up to roughly 5 percent. Lufthansa gets operational and executive control, and full privatization is possible in 2028. The group already owns Austrian Airlines, SWISS and ITA Airways, and TAP’s main appeal is its Lisbon slots to Brazil, Portuguese-speaking Africa and the United States.

TAP flies 101 aircraft to 93 destinations and carried a record 8.2 million passengers in the first half of 2026. Analysts flagged Lufthansa’s own financial pressures, including losses at its German unit. Reports say TAP is expected to stay in Star Alliance, and no timing has been given on closing or on any change to its loyalty program.

Sources: Reuters via Business Day, The Bulkhead Seat