Air France-KLM has made the first substantive move in the fight for TAP Air Portugal, submitting a formal non-binding offer for a minority stake in the Lisbon-based airline. It is a clear signal that the process has moved from broad interest and political positioning into something more concrete. For Portugal, this is the first real test of who is serious about acquiring a stake in the flag carrier. For Air France-KLM, it is a chance to seize the initiative before rivals can define the race.

The structure of the sale is what makes it so intriguing. Portugal is selling a 49.9% stake, to be made up of 44.9% to a strategic airline investor, with a further 5% reserved for employees. On paper, that still leaves the state in control. In reality, the government has indicated that it is open to selling its remaining 50.1% to the same buyer at some time in the future.

This is why Europe’s three major airline groups — which includes Lufthansa Group and IAG — are treating this not as a small investment, but as a rare shot at one of the continent’s most strategically valuable carriers.

Air France-KLM Is First To The Table

Credit: Vincenzo Pace

With its announcement this morning that it has submitted a non-binding offer, Air France-KLM is the first bidder to formally advance into the next phase. Reuters reports that the Portuguese government has set an April 2 deadline for submitting non-binding offers as it presses ahead with the sale. This will be the first real sorting mechanism in the process, as bidders are required to show not only interest, but price thinking and a strategic plan for the airline.

Parpublica, the Portuguese state holding company managing the sale, now has 30 days to prepare a report on the proposals it receives. The government will then decide which bidders move forward, with selected parties invited to submit binding proposals within 90 days. With today’s submission, Air France-KLM has ensured that it is no longer just talking about the opportunity from the sidelines, but is a formal part of that process.

Air France-KLM is also trying to frame itself as the logically superior bidder. Benjamin Smith, CEO of the Air France-KLM Group, said:

“We firmly believe that the next chapter of the airline’s history should be written as part of the Air France-KLM Group, building on this legacy and taking TAP to the next level. TAP is a natural fit within Air France-KLM’s multi-hub strategy, and our ambition is to strengthen the operations at Lisbon while developing connectivity in other cities across the country including Porto.”

That last point matters politically as much as commercially. Portugal has explicitly said that bidders must strengthen TAP’s operations and routes ​not only at its Lisbon hub, but also at Portugal’s nine ​other airports, including Porto, Faro in the Algarve tourist region, and those in ‌the ⁠Azores and Madeira archipelagos.

Why TAP Is Such A Valuable Asset

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The winning bidder will ultimately acquire a stake in one of the top 20 European airlines, based on passenger count and fleet size. Currently a member of Star Alliance, TAP carried over 16.5 million passengers in 2025, and reported €3.28 billion in operating revenue and €55.2 million in net income in the first nine months of the year. The mainline carrier operates an all-Airbus fleet of 96 aircraft, with a further 21 on order (see table below). Its regional subsidiary, TAP Express, operates a further 19 Embraer E190/195s.

According to data from Cirium, in 2025 TAP operated 100 routes, serving 88 destinations from its main base at Lisbon’s Humberto Delgado Airport (LIS), and a further 12 from its secondary base at Porto’s Francisco Sá Carneiro Airport (OPO). TAP’s real attraction for bidders is specifically that Lisbon hub and the slots, traffic flows, and geography that come with it.

The reason for this is that Lisbon has a three-pronged international network. TAP operates 11 transatlantic routes to North America, but crucially, it also flies to 14 Brazilian cities, way more than any other European airline. Add in nine destinations in Africa, including key Portuguese-speaking markets such as oil-rich Angola and Mozambique, and for any of the European bidders, this is highly attractive as it adds markets, feed, and resilience rather than simply overlapping with existing hubs.

For Air France-KLM, the appeal is especially obvious. Smith has already cast Lisbon as what would become the group’s only southern European hub, complementing Paris Charles De Gaulle Airport (CDG) and Amsterdam Schiphol Airport (AMS). It would also be a bulwark against the southern European strategies of its largest competitors in Madrid and Rome. This is why the sale is about far more than 49.9% on paper; it is about control of one of Europe’s most strategically placed mid-sized network carriers, and a crucially positioned hub.

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Looking Ahead To The Next Steps

Credit: TAP Air Portugal

So what comes next? This non-binding offer stage is basically the screening round where the bidders are expected to include not just a valuation, but also a strategic and industrial plan for TAP. After the April 2 deadline, Parpublica has 30 days to review the bids and prepare an assessment report for the government. From there, the Portuguese government decides which bidders make the shortlist.

Reuters reported that the selected groups would then be invited to submit binding offers within 90 days. That is the stage where the process becomes much more serious: firmer pricing, more detailed commitments, and a clearer picture of who is actually prepared to own and develop TAP under Portugal’s conditions.

After the binding-offer round, Parpublica is expected to prepare another assessment, and the government would then move toward selecting a preferred buyer. Reporting around the framework indicates Lisbon could also enter direct negotiations to improve the final proposal before naming a winner. The wider timeline points to a deal being finalized in the second half of this year.

The Other Bidders For TAP Air Portugal

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The competitive picture now looks far less balanced than it did a few weeks ago. The Lufthansa Group made clear last year that it was getting involved in the process, and it is still expected to bid. Tamur Goudarzi Pour, Lufthansa’s head of strategy, told Portuguese journalists this week:

“We are in the process, we have a strong interest, and we intend to present a non-binding proposal this week.”

But the big question is whether Lufthansa sees the same level of strategic value in TAP as Air France-KLM does, and how aggressively it wants to pursue another integration so soon after ITA Airways. Lufthansa bought 41% of ITA in January 2025, and the integration has accelerated further in recent weeks, with ITA joining Miles & More and Star Alliance from April 1, 2026.

That does not rule Lufthansa out, but it does mean management attention, execution bandwidth, and political capital are already being spent on a different major southern European project. Viewed through that lens, while Lufthansa may still bid, Air France-KLM arguably looks freer to “go all-in” right now, and is likely best positioned and more motivated to offer the most attractive proposition to the Portuguese government.

IAG, by contrast, looks like the weakest of the three. Bloomberg reported last month that the British Airways parent was leaning against pursuing TAP because Portugal was only offering a minority holding, which reportedly does not fit IAG’s strategy. It will be telling whether the group meets today’s deadline for non-binding offers, but even if it does, Reuters suggests it may submit a bid to keep its hopes alive, but not pursue an actual deal unless a majority stake is put on the table.

Which leaves Air France-KLM in the strongest visible position today: first to file, clearly messaging Lisbon and Porto growth, and facing rivals that either look distracted, less motivated, or edging toward the exit. It is still early, and there is a lot to be won and lost when negotiations begin in earnest, but at this stage, Air France-KLM has made itself look like the bidder most determined to turn interest into ownership.