Why Are Airlines so Eager for a Piece of TAP Air Portugal?
Photo Credit: A TAP Air Portugal Airbus plane taxis in Hamburg past Eurowings, Ryanair, and TUI aircraft. Flickr / Kevin Hackert
TAP Air Portugal is seemingly the apple of every European airline group's eye these days. That's because the state-owned airline in the southwestern corner of Europe is about to come up for sale in what is set to be the next big airline consolidation story.
The terms of the planned privatization are set to be approved at a cabinet meeting during the week of September 25, Portuguese Prime Minister Antonio Costa said Tuesday. That would potentially lead the government to open bidding for TAP in October — and that bidding is expected to be fierce.
Air France-KLM, International Airlines Group, and the Lufthansa Group have all expressed interest in TAP. And other potential bidders have yet to emerge but one cannot count out non-airline offers, for example from private equity firm Certares, which lost its bid for Italy's ITA Airways to Lufthansa last year.
How much the government wants for TAP is unclear. The airline received more than €2 billion ($2.1