Portugal's government has published the terms behind its choice of the Lufthansa Group as the new strategic shareholder of TAP Air Portugal. In a detailed communiqué on the Council of Ministers decision of 14 October, it says Lufthansa will run TAP day to day, that both bidders also made firm offers for a majority of the airline, and that Portugal could end up as a shareholder in the Lufthansa group if TAP is sold in full1. Air France-KLM said it was disappointed2. Our full TAP privatisation dossier covers the history of the sale.

The price and the second phase

Lufthansa is buying 44.9% of TAP, plus up to 5% more if employees do not take up the shares reserved for them. The state keeps 50.1%1. Lufthansa says it offered EUR 1.025 billion for the 44.9% stake, which could rise to up to EUR 1.2 billion for 49.9% because of the employee shares and a ticking fee3. The government puts the total at EUR 1,201 million and says the offer is up to 16% higher than Air France-KLM's1. Prime Minister Luís Montenegro said the government picked the financially stronger bid with the lower degree of uncertainty4.

The bigger news is the second phase. Both groups made firm proposals to buy a majority of TAP in a possible later sale, which would be a separate process1. Lufthansa's offer for that phase adds EUR 1,351 million: EUR 863 million in cash and EUR 488 million in Lufthansa shares. That would give the Portuguese state about 5% of the combined group, making it the second largest shareholder. Together, the two phases value TAP at EUR 2,552 million, assuming the second phase is completed by July 20281. Lufthansa said it welcomed the government's announcement that it intends to start the process for TAP's full privatisation3.

Who will run TAP

Lufthansa will appoint three of TAP's four executive directors and the state one. On the nine-member board, the state appoints five, including the chair15. According to the government's presentation as reported by CNN Portugal, strategy and fleet decisions on the board are taken by consensus, while capital, the articles of association, the Lisbon hub, the brand and the head office stay with the shareholders' meeting6.

The commitments attached to the bid matter most for crews. The government says TAP's fleet will grow to 117 aircraft by 2035 and up to 130 after that, an investment of EUR 3 billion to EUR 4 billion, with a possible transfer of eight Airbus A350-900s. Eight aircraft will be based at Porto, and TAP is to grow in Latin America1. Euronews reports that the A350 transfers are planned from 20307. Lufthansa Technik is to invest about EUR 300 million in a maintenance site in Santa Maria da Feira near Porto, with 700 jobs, and the government lists the possible creation of a military pilot training school at Tancos1. Montenegro spoke of 5,500 direct and indirect jobs in total, 3,000 of them linked to TAP's projected growth4. TAP stays in Star Alliance, where it has long been a Lufthansa partner3.

Reactions from pilots and the losing bidder

The Portuguese pilots' union SPAC welcomed the outcome. Vice-president Frederico Saraiva de Almeida told the Lusa news agency that both bidders were solid airlines with robust operating procedures, and that Lufthansa was not known for poor management or poor working conditions. "We have no fear at all," he said8. TAP chairman Carlos Oliveira said important steps still lie ahead and that, until the deal is completed, TAP will stay focused on its strategy, its customers and its responsibilities9.

An Air France-KLM spokesperson told Reuters the group was "naturally disappointed" not to be chosen but welcomed the constructive dialogue throughout the process2. According to the government's presentation as reported by CNN Portugal, the Air France-KLM offer would have moved TAP to SkyTeam and its joint venture with Delta and Virgin Atlantic, and included the possible transfer of five Airbus A330-300s from KLM and a widebody maintenance base with an engine shop in 20316.

For Lufthansa, TAP follows its 41% stake in ITA Airways in 202510. Chief executive Carsten Spohr called TAP "a strong and profitable airline" and a leading carrier on South Atlantic routes, and said the deal strengthens the group's position in that market3.

What happens next

Lufthansa is working with the government and Parpública, the state holding company, to finalise the transaction documents and expects to sign them shortly. Completion remains subject to approval by the relevant authorities3, including the European Commission7. The government expects closing by early 2028 and says preparation of the majority sale will start soon1. For pilots, the practical questions remain open until then: how fast the fleet grows, when the first A350s arrive, how many crews Porto needs and whether the Tancos school takes shape.