TAP Air Portugal (TP) has been a privatisation story with no ending since it first emerged seriously in 2022. The process had been repeatedly derailed owing to the political shifts in Portugal. IAG – International Airlines Group, parent of British Airways, Iberia, Aer Lingus and LEVEL, is withdrawing its interest in this carrier, and non-binding offers are due by April 2, 2026.
The Right Asset, The Wrong Terms
IAG’s interest was always conditional. IAG CEO Luis Gallego flagged TAP as “interesting”, mainly due to its Brazil network, a market which IAG currently underserves. TAP holds 25% of all Europe-Brazil seats and is the sole European carrier on nine Brazilian routes.
But the Portuguese government consistently demanded that any prospective buyer protect the interests of the existing Lisbon hub and maintain air connectivity across Porto, Faro and Funchal airports. For IAG, a group that has consistently sought full or majority ownership of its airlines, a capped minority stake with government-imposed network conditions was never going to be a comfortable fit.
Lufthansa vs Air France-KLM
With IAG indicating signs of withdrawal, the contest narrows to Lufthansa and Air France-KLM.
Lufthansa expressed its interest formally in November 2025. With a proven track record of restructuring carriers like Swiss and Austrian in the past, TAP could be an asset for Lufthansa to penetrate the Brazilian market.
Meanwhile, Air France-KLM might be a better fit with TAP. Air France-KLM CEO Ben Smith confirmed in January 2026 that the group is “actively working” on the process. A hub at Lisbon could complement Air France–KLM’s existing network by deepening its exposure to Brazil and would serve as a direct counterweight to Lufthansa’s expansion.
Who do you think is the better fit for TAP? Let us know in the comments below.
