Government approves TAP reprivatisation
The Portuguese government approved the reprivatisation of airline TAP at a Council of Ministers meeting yesterday.
While it is still not known how much of the company will be sold and for what asking price, a small 5% share will be retained by TAPs nearly 7,000 employees.
Three major airline conglomerates – the IAG Group, Lufthansa, and Air France – KLM have once again expressed their interest in buying the airline, and have stated their intention to compete in the direct sale of the company.
At the World Aviation Festival in Lisbon this week, Tim Clark, the President of Emirates (which is not competing to buy TAP) expressed the option that while the three large airline consortia would have a ‘play it cool’ attitude towards the forthcoming competition, he said that they wanted to “buy it like hell”.
However, he warned that the government had think hard on the issue of retaining Lisbon as a hub.
“We have a very good commercial relationship with TAP that is enhancing the business of both airline companies” and expressed the hope that whatever the outcome, “this won’t change, but life can change things”.
Both IAG (British Airways and Iberia) and Air France – KLM have already thrown their hats in the ring by hiring financial, legal and communication advisors to support their expected forthcoming bids.
“We want to see the conditions for the TAP privatisation competition. I believe that it could be interesting for us”, said the CEO of IAG, Luís Gallego (PICTURED)in his speech at the World Aviation Festival yesterday.
The Council of Ministers will now have to approve the Terms of Sale with the bidding conditions and selection criteria requirements. The government hopes to sell the airline by the end of the first half of 2024.
Nevertheless, TAP will have to continue its reconstruction plan agreed with Brussels that will only be completed by the end of 2025. The government can, however, ask the European Commission to authorise changes.
On Monday (today) it emerged that a secret version of TAP’s restructuring plan valued the airline at between €1Bn and €1.9Bn. This is a far-cry from the €3.2Bn that Portuguese taxpayers have ploughed into the company and has prompted figures from left-wing parties to ask why, if the airline is now profitable, sell it at all?
Finance Minister, Fernando Medina has also confirmed that Portugal’s other State-owned airline Portugália will be integrated into TAP SA and be part of the privatisation package.