Air France-KLM Interested in TAP Privatisation

LISBON (Reuters) – Air France-KLM aims to participate in the privatisation of Portugal's carrier TAP and is open to various options from the government, including buying a minority stake, according to a source familiar with the matter.

The minority government is finalising consultations with potential suitors for TAP, which include Lufthansa and British Airways owner IAG, to gather their feedback before creating a privatisation plan.

Prime Minister Luis Montenegro, who initially insisted on total privatisation, indicated on October 9 that a partial sale is also a possibility.

The privatisation must receive parliamentary approval, where opposition from the main Socialist party is expected against a majority stake sale.

The source noted that, "considering that several schemes are being explored for the approval of TAP privatisation in parliament at a later stage, Air France-KLM remains open to various options and is also comfortable with a minority stake sale."

In August, Air France-KLM acquired a 19.9% stake in Scandinavian airline SAS. TAP's attractive assets include its connections to Brazil, Portuguese-speaking African countries, and the United States from Lisbon.

Last month, sources indicated that Lufthansa CEO Carsten Spohr met with the government to express interest in TAP, reportedly targeting a 19.9% stake, which is below the 20% threshold needing European Commission approval.

European airlines advocate for consolidation to manage rising costs, but Brussels expresses concern over dominance among Europe's largest groups and is opposed to mergers.

British Airways owner IAG abandoned a plan in August to acquire Spanish rival Air Europa after rejecting the European Commission's demands for further concessions to approve the deal.