Air France-KLM Group has confirmed its interest in TAP Air Portugal, but, according to experts, it may face competition from other European airlines — Lufthansa Group and International Airlines Group. The state-owned Portuguese flag carrier is in the process of privatization and is open for partial or outright sale.
Air France-KLM Group CEO Benjamin Smith confirmed last week that a key driver of the holding's interest in TAP Air Portugal is its strong presence airlines in Brazil.
TAP currently flies from Lisbon to more than 10 destinations in Brazil.
For its part, Air France-KLM serves three Brazilian airports — Sao Paulo, Rio de Janeiro and Fortaleza, with a fourth flight to Belém starting this May.
Brazilian aviation in 2022 was able to recover to 82 percent of its pre-pandemic capacity — 97.85 million passengers were served last year. 15.62 million of them flew international flights, and the share of TAP Air Portugal in this flow is large — 1.59 million. It is second only to LATAM Brasil with 2.49 million.
This is not the first time that Air France-KLM has shown interest in the Portuguese carrier. A similar statement was made in October: “If the circumstances are right, we are interested. Consolidation is key for us, especially in Europe.”
As with Air France-KLM's bid to buy ITA Airways, the group is sure to face stiff competition from other European heavyweights. Lufthansa Group and IAG are reportedly also interested in acquiring the Portuguese airline, and this does not promise a quick end to the deal.
In the case of Italy's ITA, the consortium, including Air France-KLM and Delta Air Lines, would win and close the deal. Moreover, he was granted exclusive rights to negotiate. However, an agreement was never reached, and there is no longer any doubt that a contract with Lufthansa will be signed in March or April.
aims to catch up with its consolidating competitors.
Air France-KLM Group has received financial assistance from the governments of France and the Netherlands in connection with the COVID-19 pandemic, and is now prohibited from buying significant stakes in other airlines. However, the group expects to lift restrictions by April through refinancing measures and clear the way for more significant acquisitions in the market.
Air France-KLM also said it ended 2022 with a net profit of €728 million and an 84 percent increase in revenue compared to 2021.