Lufthansa Wins Bid to Acquire Major Stake in Portugal's Flagship Airline
Lisbon, Thursday, 15 October 2026.
Lufthansa beat Air France-KLM with a €1.2 billion bid for a 44.9% stake in TAP Air Portugal, securing key transatlantic routes and driving a massive €2.55 billion carrier valuation.
Strategic Acquisition Announced
Lufthansa Group has successfully secured a 44.9% stake in TAP Air Portugal, finalizing a competitive bidding process against Air France-KLM [1][3]. The Portuguese government confirmed the decision on Wednesday, 14 October 2026, valuing the initial transaction at €1.2 billion [1][4]. This acquisition marks a significant shift in the European aviation landscape, granting Lufthansa enhanced access to transatlantic routes connecting Europe to South America and Africa [2][5]. The state will retain a 50.1% majority stake, with an additional 5% of shares reserved for TAP employees [1][3].
Strategic Acquisition Announced
The deal implies a total enterprise valuation of approximately €2.552 billion for the Portuguese flag carrier, according to government officials [3][5]. Regulatory approval from the European Union is still required before the transaction can be completed, a process expected to conclude shortly [2][3]. Prime Minister Luis Montenegro highlighted that the selected offer was 16% higher than the rival proposal and carried a lower degree of uncertainty [3]. This phase represents the first step in a broader privatization strategy that may conclude with full privatization by 2028 [1][3].
Operational Expansion and Investment
Lufthansa plans to leverage TAP’s network to strengthen its position in the South Atlantic market, where TAP operates flights to 16 destinations in Central and South America [1][2]. Strategic commitments include expanding TAP’s fleet to 117 aircraft by 2035, a significant increase from the more than 90 aircraft currently in operation [1][3]. This expansion represents a fleet growth target of 30 percent over the next decade [1][3]. Additionally, up to eight Airbus A350-900s are scheduled for transfer starting in 2030 to modernize the long-haul capacity [3][5].
Operational Expansion and Investment
Infrastructure investments are set to accompany the fleet expansion, including €500 million allocated for a pilot training school in Tancos and an innovation center in Aveiro [3][5]. Lufthansa Technik is also developing a facility near Porto, with workforce projections exceeding 1,000 direct jobs by 2030 [2][5]. These initiatives aim to create 3,000 jobs linked to TAP’s growth and a total of 5,500 direct and indirect jobs across the investment initiatives [3][5]. The German airline has been active in Portugal for over 70 years and currently operates 353 weekly flights to six Portuguese destinations [2][5].
Financial Performance and History
TAP Air Portugal reported a net profit of 4.1 million euros in the previous fiscal year, though recent accounts indicate a loss of €99.2 million for the first half of 2026 [1][3]. This financial volatility underscores the importance of the capital injection and operational support provided by the new partnership [3][5]. Previous attempts to privatize the airline in 1998 and 2015 failed, resulting in the company returning to state ownership [1]. The current agreement includes provisions for Lufthansa to acquire employee-reserved shares if they remain unpurchased, potentially increasing their stake to 49.9% [2][3].