Lufthansa Group is the latest European aviation giant to throw its hat in the ring for a minority stake in TAP Air Portugal.
The Germany-based group on Thursday said it intends to play “an active role” in the privatisation of the Portuguese flag carrier and has sent a formal letter to Parpública, the state-owned holding company controlling a majority stake in TAP, expressing interest in initially acquiring a minority share in TAP, with hopes of establishing “a long-term partnership".
Lufthansa Group chairman and CEO Carsten Spohr said: “TAP Air Portugal is of great strategic importance to the European aviation industry. As a long-standing partner in the Star Alliance and with our extensive investments in Portugal, we continue to see the Lufthansa Group as the best partner for TAP and for Portugal."
He added: “The Lufthansa Group has always been a driver of consolidation in Europe. It has successfully strengthened national airlines such as SWISS, Austrian Airlines, Brussels Airlines, and most recently ITA Airways, while preserving their national identities. As the global number one outside the US, the group offers the necessary size, experience, and financial stability to create sustainable value and strengthen TAP Air Portugal's role as an ambassador for the country around the world.”
Air France-KLM and British Airways parent IAG have also expressed interest in taking a minority stake in TAP. Both companies this week submitted formal letters of interest to Parpública, according to Reuters.
If approved, the transaction would mark another step towards consolidation within Europe’s airline industry following Lufthansa’s recent acquisitions of a 41 per cent stake in ITA Airways and a 10 per cent stake in AirBaltic. Air France is also awaiting regulatory approval following its bid earlier this year to take a majority stake in Scandinavian carrier SAS.
The Portuguese government in July confirmed plans to sell a 44.9 per cent stake in TAP Air Portugal, with an additional 5 per cent to be sold to TAP employees.
TAP Q3 results
TAP Air Portugal this week posted a positive third quarter result ahead of its privatisation plans.
Operating revenues totalled €1.33 billion for the quarter, up 2.7 per cent compared to the same period last year. Passenger revenues increased 0.5 per cent to €1.193 billion, supported by higher capacity and improved load factors.
After expanding its summer operations with a 4 per cent increase in capacity, the carrier reported a positive net income of €125.9 million for Q3, fully reversing losses recorded in the first half of the year.
TAP CEO Luís Rodrigues, in a statement, said: “During this quarter, our shareholder approved the start of the process for the partial privatisation of TAP’s capital.
“As this process is expected to extend over several quarters, our strategic focus remains unchanged: to transform TAP into a sustainably profitable and attractive company by consolidating operational efficiency and financial sustainability, through our daily commitment and work, with the support of our stakeholders and the dedication of our people.”