LONDON (Reuters) -British Airways-owner IAG has submitted a formal expression of interest in buying a minority stake in Portugal’s flag carrier TAP, but said some issues would need to be addressed before it would be willing to invest.
IAG is the third airline to formally show interest in the privatisation of TAP, joining European rivals Air France-KLM and Germany’s Lufthansa.
An IAG spokesperson on Friday confirmed the airline has submitted a statement of interest to state-owned holding company Parpublica, “in line with the government’s process for the part-privatisation of TAP”.
“However, several terms would need to be addressed before IAG could propose an investment,” the spokesperson added.
PORTUGAL SEEKING TO SELL A 44.9% STAKE
Portugal relaunched the long-delayed privatisation of TAP in July, seeking to sell a 44.9% stake to an airline capable of boosting the company’s global scale and competitiveness, with a further 5% to be offered to TAP employees.
TAP’s most attractive assets are its connections to Brazil, Portuguese-speaking African countries and the United States from its Lisbon hub, which the government wants to keep and expand.
“We believe TAP has significant potential within IAG. Our decentralised model delivers industry-leading margins and aligns with the Portuguese government’s objective of protecting TAP,” IAG said in a statement.
One criticism frequently cited by analysts regarding IAG’s potential bid is that the Lisbon hub is very close to the Madrid base of IAG-owned Spanish airline Iberia.
In the long term, this could mean that IAG might divert routes from Lisbon to Madrid, reducing the importance of the hub in Portugal.
However, IAG said its track record shows how it invests “to strengthen airlines, benefiting customers, employees, local economies, and shareholders”.
(Reporting by Sarah Young and Sergio Goncalves; Editing by Paul Sandle and Conor Humphries)
