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Portugal launches a new privatisation of TAP airline, with aims to sell 49.9%

Luis Montenegro, Portugal's Prime Minister, announced on Thursday that the government had decided to restart a long-delayed TAP privatisation, with a goal of selling a 49.9% share of its capital. A 5% stake will be offered to TAP employees.

In a short televised announcement, he stated: "We made this decision because we have already spent a great deal of money... We do not want to keep pouring money down a bottomless hole."

Three major European airlines have already expressed interest in the airline's privatisation. These include Lufthansa, Air France-KLM and British Airways' owner IAG. They met with the government last year.

Montenegro stated that "we are confident that there will many interested parties". The government also said that by selecting a strategic partner it "wants the company to be sustainable and profitable, as well as to be able contribute to the economic development of the country".

The government is keen to keep and even expand TAP's key slots from Lisbon to Brazil, Portuguese speaking African countries and the United States.

Montenegro said TAP was crucial for Portugal, as it brings in the majority of air travelers. This has supported the tourism boom that Portugal has experienced over the past few years.

TAP suffered a loss of 1.6 billion euro in 2021 due to the COVID-19 pandemic. This led to reorganization and a bailout from the state. However, the company has returned to profitability in the past three years.

TAP, which employs approximately 8,000 people and has a fleet of 99 aircraft, will transport more than 16 millions passengers in 2024. This includes the 19 aircraft that TAP Express, a subsidiary of TAP, uses to fly short and medium distance flights. .

TAP had been set up for privatisation since the mid-90s, but it was halted again when the centre right minority government fell in March.

After a May national election, the coalition is back in power, but it still lacks a majority of parliament members, which would prevent TAP from being sold. (Reporting from Sergio Goncalves & Andrei Khalip).

(source: Reuters)