What Lufthansa Stands to Gain From Its Up-to-€1.2 Billion TAP Air Portugal Deal, and When
Germany's Lufthansa group, which won the bidding for up to 49.9% of Portugal's TAP Air Portugal, could gain about €450 million a year in savings and extra revenue. Analysts say the benefits may be slow to arrive.
German aviation group Lufthansa has won the Portuguese government's sale process for up to 49.9% of national carrier TAP Air Portugal, in a deal worth up to €1.2 billion. According to a report published on Tuesday by Gimme Credit, an independent corporate bond research firm, the group could see roughly €450 million a year in savings and additional revenue, though the benefits may take time to appear.
Terms of the deal
Last week the Portuguese government chose Lufthansa's offer over a rival bid from the Franco-Dutch group Air France-KLM. The agreement still requires final negotiations, approval from Portugal's cabinet and clearance from the European Commission, with completion pencilled in for 2028.
Lufthansa will pay €1.025 billion for 44.9%. The price rises to as much as €1.2 billion for 49.9% if it also buys shares first offered to TAP employees (up to 5%) and pays a so-called ticking fee, which accrues until closing. The state will keep 50.1%, Lufthansa will name the CEO, and the government will hold a board majority. The offer valued TAP about 16% above Air France-KLM's and was entirely in cash.
Where the gains lie
TAP was profitable for a fourth consecutive year in 2025, but net profit shrank to €4.1 million, and it lost €99.2 million in the first half of 2026 as fuel costs rose. Cedric Rimaud, Gimme Credit's director of European research, said Lufthansa's management expects synergies from commercial activities, network connections, joint purchasing and cargo. The main prize is TAP's network to Brazil and the rest of Latin America. TAP holds 24% of seat capacity between Europe and Brazil; with TAP, Lufthansa's airlines would hold 36%.
Why it will take time
Lufthansa has pledged to keep TAP as a standalone airline, which, together with state control, will limit group-wide rationalisation. The group plans to bring TAP into its transatlantic joint venture with United Airlines and Air Canada, but a similar promise made when it bought into ITA Airways in January 2025 is still pending: ITA awaits US Department of Transportation approval. Rimaud sees revenues from such integration as unlikely before 2030. Growth at Lisbon airport is also capped because it is full.
Gimme Credit kept its "sell" recommendation on Lufthansa's bonds.
