The Portuguese government says it intends to privatise TAP Air Portugal by July despite the crisis in the Middle East and International Consolidated Airlines Group (IAG), owner of British Airways and Iberia, reportedly threatening to walk away from bidding for a 44.9% stake in the national carrier.
Miguel Pinto Luz, Portugal’s Minister of Infrastructure and Housing, said the government still intends to stick with its privatisation schedule for the airline.
On Friday March 20 rumours surfaced that IAG may drop its bid because of the conditions related to the sale, which include a cap on ownership and having to bolster the carrier’s operations and routes across all Portuguese airports including its main Lisbon hub. This apparently undermined IAG’s plans regarding control of the company and its ability to optimise its operations.
A Bloomberg report suggested that IAG had not come to a final decision and that it could make a non-binding offer by the April 2 deadline.
If IAG abandons its bid for the TAP Air Portugal stake that will leave the Franco-Dutch Air-France-KLM group and Germany’s Lufthansa Group as the remaining two bidders to become strategic partners for the airline.
IAG was considered by some analysts to be the logical candidate to buy into TAP Air Portugal given its ownership of Iberia Spain’s national flag carrier. It would strengthen the group’s position in the Iberian peninsula and on routes between there and Latin America. However, taking a stake in the Portuguese airline could trigger an anti-trust investigation from the European Commission.
TAP Air Portugal’s long-running privatisation has had a difficult history. After the airline was rescued with billions in state aid during the Covid pandemic and fully nationalised, the Portuguese government renewed efforts last year to bring in a private partner. The aim is to ease pressure on public finances while boosting the carrier’s competitiveness by linking it to a global airline group. A tender for a 49.9% - with 5% reserved for employees - stake was relaunched in July 2025 following earlier failed attempts amid political opposition and uncertain market conditions.
IAG signalled interest in November 2025, with analysts viewing the move as a way to strengthen its network by using Lisbon as a complementary hub to Madrid.