Lufthansa expects its planned entry into TAP Air Portugal to generate annual synergies of up to €450 million, with the benefits potentially available from the first full year after acquiring an initial minority stake. The German group also expects to exercise operational control over TAP and influence the appointment of its chief executive, despite Portugal initially retaining a majority holding.
Portugal selected Lufthansa for the acquisition of 44.9% of TAP for €1.025 billion, with the transaction potentially rising to €1.2 billion if shares reserved for employees bring the German group’s holding to 49.9%. The state will initially retain at least 50.1%, while Lufthansa has welcomed Portugal’s stated intention to pursue full privatisation.
The financial structure could give Lufthansa up to 75% of TAP’s profits despite its minority position, CFO Till Streichert indicated during an analyst conference. The investment is centred on Lisbon’s hub and TAP’s links to Brazil, Latin America, Portuguese-speaking Africa and the United States. Lufthansa estimates the combined group would account for about 20% of Europe–Latin America traffic, compared with 9% for Lufthansa alone.
TAP’s fleet is planned to increase from 101 aircraft to 117 by 2035 and to 130 after Lisbon’s proposed new airport opens. Lufthansa prevailed over Air France-KLM with an offer Portugal valued as 16% higher and less uncertain. Transaction documents still need to be finalised, and completion remains subject to regulatory approval, including EU competition clearance.