British Airways parent IAG joins race to acquire stake in TAP Air
The race is now between at least three groups: Air France-KLM, IAG, and Lufthansa Group.
The International Airlines Group (IAG), the parent company of such airlines as Aer Lingus, British Airways, Iberia, and others, has confirmed that it has expressed its formal interest in acquiring a minority stake of 44.9% in TAP Air Portugal, joining a race that is now between at least three European airline groups: Air France-KLM, IAG, and Lufthansa Group.
IAG’s formal interest, reported by Reuters, was officially submitted to Parpública, the state holding company, which is overseeing the sale of a 44.9% stake in TAP Air Portugal. The group’s spokesperson told Reuters that TAP Air Portugal has “significant potential within IAG.”
The Engine Cowl has approached IAG for comment.
During the group’s H1 earnings call on August 1, Luis Gallego, the Chief Executive Officer (CEO) of IAG, expressed a similar sentiment, saying that the group was the best place to develop TAP Air Portugal. Other airlines that have joined the group over the years have improved their financial performance, Gallego added, noting that IAG and the Portuguese airline have “complementary networks.”
“But as I said, we need to wait to see the conditions. And we cannot obtain the margins that we have in the group, between 12% and 15% in the different airlines, if we do not have the freedom to do the right thing to develop the business. So, that is going to be the main concern for us in this process.”
According to Cirium’s Diio Mi, during the recent summer 2025 season, in August 2025, TAP Air Portugal offered 104 weekly departures to South America, flying from Lisbon Airport (LIS) and Porto Airport (OPO) to 12 destinations on the continent.
In comparison, Air France-KLM had 132 weekly departures during the same month, IAG had 144, and Lufthansa Group had only 60, which includes ITA Airways’ routes. Their networks are displayed below. (Air France-KLM, IAG, and Lufthansa Group, respectively.)
Photo: Great Circle Map
Whatever group wins the process, it will, undoubtedly, have to face the European Commission (EC). The Commission previously not only forced IAG to abandon its plans to up its Air Europa stake from 20% to 100%, but also forced Lufthansa Group to offer remedies when it approved the group’s acquisition of 41% of ITA Airways’ shares.
This included ensuring competition on short-haul and long-haul routes, the latter of which included flights from Rome Fiumicino Airport (FCO) to San Francisco International Airport (SFO), Toronto Pearson International Airport (YYZ), and Washington Dulles International Airport (IAD).
“Given that Lufthansa and its joint venture partners United Airlines and Air Canada coordinate on price, capacity, and scheduling, and share revenues, the Commission treats the activities of ITA, Lufthansa, and its joint venture partners as those of a single entity when assessing this transaction.”
The Portuguese government moved to re-privatize TAP Air Portugal once it finalized a decree in August, arguing that it cannot further invest in the flag carrier, which operates “in a competitive and global sector, where business scale is essential for strengthening its network of destinations and improving the efficiency of the entire operation.”
IAG joined Air France-KLM and Lufthansa Group in expressing and confirming interest in acquiring a stake in the Portuguese airline. In an interview with Bloomberg on November 18, Ben Smith, the CEO of Air France-KLM, confirmed that the Franco-Dutch airline group submitted its formal interest to Parpública.
Air France-KLM has also initiated a process to acquire a majority (60.5%) stake in SAS in July. It currently has a 19.9% shareholding in the Scandinavian carrier.
On November 20, Lufthansa Group joined Air France-KLM in expressing its interest in a stake in TAP Air Portugal, with Carsten Spohr, the Chairman and CEO of Lufthansa Group, saying that the Germany-based airline group was the best fit for the Portuguese carrier, in part due to the fact that both are part of Star Alliance.
Rytis Beresnevicius
On September 23, Parpública confirmed that the sale of 44.9% of shares of TAP Air Portugal is going to happen, inviting interested parties to participate in “a competitive process, in accordance with the requirements and terms established by national and European legislation […].”
The submittal deadline is at 16:59 local time (UTC +0) on November 22.
TAP Air Portugal ended Q3 with a net profit of €125.9 million ($144.8 million), with its nine-month result ending up being a net profit of €55.2 million ($63.5 million).
Luís Rodrigues, the CEO of TAP Air Portugal, said that the airline experienced “one of the busiest summers in recent years, with increased capacity, carried passengers and operated flights, but also one of the most challenging, marked by continued competitive pressures and operational disruptions.”
“During this quarter, our shareholders approved the start of the process for the partial privatization 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.”
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