Lufthansa Signs €1.025bn Deal for 44.9% of TAP Air Portugal

Lufthansa is paying about $1.2 billion for less than half of an airline, and the reason sits in Brazil. Lufthansa Group and the Portuguese government have signed the sale of 44.9% of TAP Air Portugal for €1.025 billion.

Why Latin America

Lufthansa estimates it carries about 9% of Europe–Latin America traffic, and about 20% with TAP included. Lisbon's long-standing Brazil connections open markets where Lufthansa has so far had limited reach.

That explains the price. The investment is more than three times what the group paid for 41% of ITA Airways in 2025, even though TAP is a smaller European carrier.

CEO Carsten Spohr said the two networks are complementary, especially in South America and Brazil. Lisbon would become the group's seventh hub, and growth is also planned toward Portuguese-speaking Africa and North America.

Lufthansa versus Air France-KLM

Air France-KLM had looked like the more attractive buyer. Its hubs in Paris and Amsterdam seemed a better complement to TAP, and it was not busy integrating an earlier purchase, as Lufthansa is with ITA. Lufthansa did have one advantage: an existing tie to TAP through Star Alliance.

The offer decided it. Portugal said Lufthansa's proposal was up to 16% higher than its rival's and carried less uncertainty. In the final round both bidders improved their offers, so the strategic commitments no longer differed much.

Prime Minister Luís Montenegro called Lufthansa "the choice that best protected Portugal's national interests."

What Portugal gets

Lufthansa pledged to preserve TAP's Portuguese identity, improve regional links and put more money into the Portuguese operation. The government has sketched a possible expansion of the fleet to 130 aircraft. Lufthansa Technik's planned site near Porto is expected to push the group's headcount in Portugal past 1,000 by 2030.

Control and the Iberia model

Lufthansa wants TAP to follow Iberia inside IAG. In 2025 Iberia recorded a 16.2% operating margin and €1.31 billion in operating profit. The plan relies on shared scheduling, purchasing and distribution, and on more connecting passengers.

But Iberia's turnaround came under IAG's full ownership. TAP starts with Portugal holding the majority, and the airline faces profitability pressure of its own. Lufthansa's multi-brand model, built through SWISS, Austrian, Brussels and ITA, lets carriers keep their identities while sharing resources, yet it has not before had to deliver synergies without control.

Funding and the Commission's approval

Lufthansa pays from existing liquidity. The deal still needs European Commission approval before it can close. According to Euronews, Lufthansa could lift its stake to 49.9% by buying shares first reserved for TAP employees, taking the total to about €1.2 billion.

It expects up to €450 million in synergies, most of them possibly before it holds a majority. Lufthansa has welcomed a possible full privatization of TAP.

Our View

The €450 million target depends on how much Lufthansa can coordinate without a majority, and that balance is the hard part. The Commission's review and any step toward majority ownership will show how quickly the plan can move.

Source: Simple Flying