IAG mounts “charm offensive” for TAP bid

The major European airlines conglomerate IAG (International Airlines Group) which combines leading airlines British Airways, Iberia, Vueling, Aer Lingus and LEVEL (IAG’s new low-cost airline brand) is to officially make a bid for TAP.

The news was broken by the online news service ECO which reported on Tuesday that Luís Gallego, the CEO of IAG Group made a whistle-stop visit to Lisbon on Monday to mount a charm offensive as to why the Portuguese national carrier would be safe in its hands.
Luis Gallego met with the Mayor of Lisbon, Carlos Moedas and the President of the Tourism Confederation of Portugal, Francisco Calheiros; a meeting in which he warded off the nightmare for the Portuguese government that TAP would be absorbed into the Madrid Hub system, thereby Lisbon losing its status as a hub for Latin America and Africa.
The IAG Group is one of the interested parties in the capital sale of the Portuguese airline company. The interest from IAG, which owns Iberia whose operation is centred at Barajas airport in Madrid, has been viewed as a threat to TAP’s hub at Lisbon’s Humberto Delgado airport.
This fear was voiced by the Minister for the Economy, António Costa Silva in parliament recently who said: “I particularly feel that Iberia is not a good solution”.
Luís Gallego was in Lisbon to stress that Iberia is only one of the several airlines in the group and that the idea was not to “cannibalise” TAP routes at Lisbon airport, but to take advantage of its links to Brazil, the US and Africa. There were no ministers present at the meeting.
IAG has now hired legal and communication advisors for the operation from the law firm Vieira de Almeida (VdA) and agency Cunha Vaz & Associados (CVA, respectively.
IAG has a capital listing of €9.4Bn on the stock market and had been one of the main players in the consolidation of the sector in Europe. In February, it announced an agreement to buy 100% of the capital of Spanish airline Air Europa from Juan José Hidalgo, paying €400 million for the 80% that it had yet to control.
The two other main interested parties in TAP are Lufthansa and Air France-KLM. When it presented its results in 2022, Lufthansa’s CEO Carsten Spohr said that TAP and Italian airline ITA were both interesting targets for mergers and acquisitions in Europe and is now currently in negotiations with the Italian government for a 40% capital share in the Italian company.
Air France – KLM has said it will only make bid for TAP if the privatisation model is attractive.