A bidding war is expected to be triggered between British Airways owner IAG, Air France-KLM and Lufthansa as TAP Air Portugal is set for privatisation.
Portugal’s finance minister Fernando Medina said on Thursday that the cabinet had approved the sale of at least 51% of the state-owned carrier.
He pointed out there was value in TAP’s “privileged connections” to the Portuguese-speaking world, including countries such as Brazil, Angola and Mozambique.
Medina said: “There are interested airlines and their interest is public, which we welcome as a positive sign for the success of this operation.”
IAG indicated interest in TAP this summer.
IAG chief executive Luis Gallego was reported as saying in Lisbon on Wednesday: “We’ll have to study the process [of privatisation] and carefully consider the details, but we feel optimistic and believe that TAP can become another success story within IAG.”
IAG agreed to buy Spain’s Air Europa earlier in the year, while Lufthansa bought Italy’s ITA, the successor to the defunct Alitalia.
A Lufthansa spokesperson told Reuters: ”The Lufthansa group always seeks to have an active role in consolidating the market. That’s why the planned sale of a stake in TAP is interesting for us,”
The German airline and TAP would complement each other, especially through TAP’s routes to South America, they added.
TAP is estimated to be worth around €1 billion after returning to profit last year following a government bailout during the pandemic.
The airline’s employees will get 5%, while the stake to be left in state hands is yet to be determined.