Portugal's government has picked Lufthansa to buy up to 49.9% of TAP, in a deal worth as much as €1.201 billion, with the Portuguese State keeping a 50.1% majority for now. Air France-KLM lost out despite a rival bid of €1.038 billion plus a possible €100 million bonus tied to 2028 financial targets — the government said Lufthansa's offer was up to 16% higher and carried less financial uncertainty.

For anyone who flies TAP, the headline commitments are reassuring on the surface: the TAP brand stays, the headquarters remains in Portugal, and the Lisbon hub gets strengthened rather than downgraded. Lufthansa has promised fleet growth to 117 aircraft by 2035 and 130 beyond that, plus around €300 million of investment and 700 jobs in a new aircraft maintenance facility in Santa Maria da Feira, near Porto.

Not everyone is celebrating. TAP union SITAVA warned the day after the announcement that workers must not be left to "rescue" the airline again, as it says has happened after previous privatisations. The union is particularly worried about TAP's maintenance and engineering operations being folded into the Lufthansa Group — a move it called "a gross mistake". Union concerns were raised with both bidders during the process.

The numbers break down like this: the initial 44.9% stake is valued at €1.025 billion, with €58 million in adjustments and €118 million attributed to a 5% stake reserved for employees. If employees don't take up their full allocation, Lufthansa can absorb the remainder, taking it to the 49.9% ceiling.

There's also a possible second act. Both bidders had to outline terms for the State selling its remaining 50.1%, and Lufthansa offered a further €1.351 billion — €863 million in cash and €488 million in Lufthansa shares. In that scenario, TAP becomes wholly Lufthansa-owned and Portugal ends up holding roughly 5% of the enlarged group, making it the second-largest shareholder. Total implied valuation of TAP: around €2.552 billion.

Don't expect quick changes. The first phase still needs final negotiations and regulatory clearance, with completion expected in 2028, and the full takeover isn't approved at all yet. In practice, travellers should see business as usual on TAP routes for some time — with the promise of a bigger fleet and a stronger Lisbon hub as the longer-term upside.