LISBON (Reuters) – Air France-KLM wants to take part in the privatisation of Portugal’s carrier TAP and is open to various options the government may offer, including purchasing a minority stake, a source familiar with the matter told Reuters.
The minority government is finalising consultations with potential suitors for TAP, who also include Lufthansa and British Airways owner IAG, to hear their views before coming up with a privatisation plan.
Prime Minister Luis Montenegro, who had previously insisted on a total privatisation, on Oct. 9 signalled that a partial sale was a possibility.
The privatisation must be approved by parliament, where the main opposition Socialists have promised to vote against the sale of a majority stake.
The source said that, “considering that several schemes are being explored for the approval of TAP privatisation in parliament at a later stage, Air France-KLM remains open to the various options and is also comfortable with a minority stake sale”.
In August, Air France-KLM completed the acquisition of a 19.9% stake in Scandinavian airline SAS.
TAP’s most attractive assets are its connections to Brazil, Portuguese-speaking African countries and the United States from its Lisbon hub.
Last month, sources told Reuters that Lufthansa CEO Carsten Spohr had met with the government to formally signal his company’s interest. One of the sources said Lufthansa was eyeing a 19.9% stake in TAP, below the 20% threshold that would require approval from the European Commission.
European airlines have said consolidation is needed to help the industry cope with soaring operating costs, but Brussels is concerned that Europe’s three largest groups are becoming too dominant and has taken a negative attitude towards mergers.
British Airways owner IAG in August ditched a plan to take over Spanish rival Air Europa after refusing the European Commission’s demand for more remedies to allow the deal.
(Reporting by Sergio Goncalves; editing by Andrei Khalip; Editing by Sharon Singleton)