Air France-KLM Explores Participation in TAP Air Portugal Privatization
The Franco-Dutch group has expressed its willingness to preserve the brand.
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Air France-KLM is actively exploring the possibility of participating in the privatization of TAP Air Portugal, the country’s flag carrier, according to CEO Ben Smith.
This move comes as several European airlines, including Lufthansa and IAG (owner of British Airways), have also expressed interest in acquiring a stake in TAP.
Discussions with the Portuguese Government
Smith confirmed that Air France-KLM has held constructive talks with the Portuguese government regarding its potential involvement in TAP’s privatization.
The Franco-Dutch airline group has expressed its commitment to preserving TAP’s brand, route network, and local jobs—key priorities for the Portuguese government, according to a report by Reuters.
Smith emphasized that the timing and conditions of the privatization will be determined by the Portuguese government and that Air France-KLM is prepared to meet the established requirements.
Strategic Importance of TAP
In addition to Air France-KLM, Lufthansa and IAG have also shown interest in TAP’s privatization.
This reflects TAP’s strategic significance in the European aviation market, particularly due to its strong network in Latin America and Africa, as well as its key position in the Portuguese market.
Partnership Approach Instead of a Full Merger
Air France-KLM favors a strategic partnership with TAP rather than a full merger. This approach aims to avoid regulatory scrutiny from the European Commission, which has raised concerns about major airline acquisitions.
Smith noted that the European Commission’s stance on mergers could impact the competitiveness of European airlines, and that Air France-KLM has not engaged in discussions with EU regulators regarding TAP.
European regulators have expressed concerns that large airline acquisitions could lead to higher airfares for consumers.
To address this, Air France-KLM is opting for a partnership model instead of a full acquisition, which could make regulatory approval easier.
Expanding Market Reach
TAP Air Portugal holds a strategically valuable route network, especially in Latin America and Africa—key markets for Air France-KLM’s expansion.
Acquiring a stake in TAP would allow Air France-KLM to strengthen its position in the European market and better compete with other global airlines.
Macron’s Support
Ben Smith mentioned that talks with the Portuguese government have received political backing from French President Emmanuel Macron, who has publicly supported a potential partnership between Air France-KLM and TAP.
This political endorsement could facilitate negotiations and regulatory approval.
Privatization Timeline and Next Steps
TAP’s privatization process depends largely on the Portuguese government, which has stated its intention to proceed with the transaction this year.
Air France-KLM will continue evaluating the opportunity and the privatization terms, moving forward with the project if the timing is deemed appropriate.
Conclusion
In summary, Air France-KLM is seriously considering joining TAP Air Portugal’s privatization, with a focus on preserving the airline’s brand, network, and local workforce.
This strategic move could strengthen Air France-KLM’s position in both the European and global aviation markets. However, it will depend on the conditions set by the Portuguese government and regulatory approval from the European Commission.
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