Lufthansa will not lower price offer for TAP despite war with Iran

Lufthansa will not change its price offer after the government decided to maintain the schedule defined at the start of the TAP privatization process.

With the conflict in the Middle East still causing uncertainty throughout the aviation sector, the German group assures that the war will not change the value that will be included in the non-binding offer, to be submitted by April 2, for the purchase of the Portuguese airline.

The aviation group led by Carsten Spohr states that several calculations will be made to arrive at a final offer for TAP, but that the Iran war will not be one of them. Currently, all airlines worldwide are being impacted by the conflict, whether through route diversions or the increase in the price of jet fuel.

In statements to Portuguese journalists in Frankfurt, Lufthansa’s Executive Vice President of Strategy, Tamur Goudarzi Pour, assured that the offer will focus on the group’s long-term vision for the Portuguese airline, and cannot be impacted by an effect that may be temporary, even if the conflict has already lasted for five weeks.

“We will take everything into consideration, especially if they are structural or temporary changes. Everything has its place in the offer that we are going to make, but that doesn’t mean we’re going to apply a discount because of the Iran war,” the executive argued.

Nevertheless, Goudarzi Pour admits that some “structural effects” are already being felt throughout the industry. Between cancelled routes, the price of jet fuel, constraints on strengthening operations, and searches in other destinations, the executive vice-president of the German group, which is competing for TAP alongside Air France-KLM and IAG, states that it is impossible to know “what impact this crisis will have. It’s not something that will disappear quickly.”

The executive vice-president admits that the price to be offered “is one of the components” on the table in this non-binding proposal, with “others to consider.” However, he assures that the conflict in the Middle East, involving the US, Israel, and Iran, and impacting nearby regions, namely the United Arab Emirates, will not affect the value that will be included in the document to be submitted to Portugal’s public companies holding Parpública: “We cannot be changing the price every three weeks when there is a crisis,” he argued.

Source: Negócios; Credits: Lufthansa Group