Portugal's government has picked Lufthansa as the new strategic partner for national carrier TAP, beating Air France-KLM with a €1.2 billion bid approved at a Council of Ministers meeting on October 14. The German group will initially take 49.9% of the airline for €1.025 billion, with extra components covering a 5% employee tranche and services businesses Cateringpor and SPdH. Air France-KLM's rival offer came in at €1.038 billion, but conditions tied to TAP hitting financial targets by 2028 counted against it.
The deal values TAP at roughly €2.4 billion, and the pitch goes beyond money. Lufthansa plans to grow TAP's fleet from today's 101 aircraft to 117 by 2035, and up to 130 once Lisbon's new airport opens — investment that could reach €4 billion, including a possible transfer of eight Airbus A350-900s after 2030. There's also a proposed aviation training school at Tancos Air Base, bringing around 200 jobs. Both bidders committed to protecting existing jobs and labour agreements.
Why did Lufthansa want TAP so badly? Latin America. TAP's strength is its web of routes between Europe and Brazil and other South Atlantic destinations, and the deal would lift Lufthansa's market share in Latin America from about 9% to 20%. TAP, which flew 16.7 million passengers in 2025, now joins a group that carried around 135 million — alongside Lufthansa, Swiss, Austrian, Brussels Airlines and ITA Airways.
For travellers, the practical news is reassuring on several fronts. TAP stays in Star Alliance, so miles and status with partners like United, SAS or Singapore Airlines keep working the same way — an Air France-KLM win would have forced a switch to SkyTeam. Lufthansa also wants to fold TAP into its joint transatlantic venture with United, which could mean more coordinated North America routes and pricing. Lisbon keeps its role as the European gateway to South America and Africa, and fleet growth plus a new Lisbon airport should eventually mean more capacity and connections.
Don't expect changes overnight, though. The deal still needs final negotiations and sign-off from Portuguese and European competition regulators, and the European Commission review alone could take 18 to 24 months. Portugal's finance minister says completion is unlikely before 2028. Lufthansa has tabled a proposal for a second phase — buying the remaining 50.1% for €863 million plus a stake in Lufthansa Group worth about €488 million — but that's an option, not a done deal. Analysts have called the partial sale a good outcome for the Portuguese state, with projected dividends potentially pushing the total return to around €3.4 billion by 2040.
If you fly TAP regularly, the short version: book as normal, keep earning Star Alliance miles, and watch for a slowly upgraded fleet and stronger Lisbon hub over the coming years.
