San Francisco Frontiers - Lufthansa enters race for TAP stake against Air France-KLM

TAP, nationalised during the Covid pandemic, is among a handful of state-owned carriers remaining in Europe, and is of interest to bigger players due to its routes to Brazil and Portuguese-speaking Africa.

Lufthansa, which already owns a host of carriers and is Europe's biggest airline group by revenue, said it had submitted a bid to the state holding company that owns TAP.

"Our goal is to strengthen Portugal's global connectivity, preserve TAP's Portuguese identity, and ensure the airline's sustainable growth," said Lufthansa CEO Carsten Spohr in a statement.

"TAP Air Portugal is of great strategic importance to the European aviation industry... with our extensive investments in Portugal, we continue to see the Lufthansa Group as the best partner for TAP and for Portugal."

Lisbon announced in September it was seeking a major international airline to buy most of the 49.9 percent stake in the carrier which it plans to privatise.

Lufthansa said that after acquiring a "minority stake", it aimed to establish a "long-term partnership" with Portugal's national airline.

Air France-KLM said Wednesday it had also formally expressed its interest to take a stake in TAP.

IAG group, which includes British Airways and Iberia, has also previously said it is keen on taking a stake.

The three groups have in recent years become the dominant players in Europe's aviation sector.

As well as being Germany's flag carrier, Lufthansa operates Eurowings, Austrian, Swiss and Brussels Airlines and recently acquired a stake in Italy's ITA, formerly Alitalia.

The government in Lisbon has made maintaining routes to Portuguese-speaking parts of the world a priority in any deal for TAP.

On Wednesday the Portuguese carrier reported that it flew back into the black in the July-September period, booking a healthy profit.

D.Robinson--SFF