Air France-KLM Confirms Interest in TAP
During a Q3 press conference, Air France-KLM CEO Ben Smith said the group was interested in taking a stake in TAP Air Portugal (TP).
During a Q3 press conference, Air France-KLM CEO Ben Smith said the group was interested in taking a stake in TAP Air Portugal (TP).
DALLAS - Air France-KLM has said it is interested in taking a stake in TAP Air Portugal (TP). At the group's Q3 press conference, Chief Executive Officer Ben Smith stated that TP might be an "option."
This comes as the Portuguese government looks for an industry backer for its flag carrier, which it rescued during the COVID-19 pandemic.
Smith also said they have looked at the "entire Iberian peninsula... for many years," recalling that his company had had a relationship with Spanish airline Air Europa (UX) before the carrier moved to IAG.
Smith then stated, "we had extensive involvement both commercially and on the investment side with Air Europa… on that, we couldn't find a deal or a construct that was satisfactory to us… so TAP of course could be another option for us to have a larger presence."
On October 19, Portuguese Infrastructure Minister Pedro Nuno Santos said that TAP needed to merge with a "large aviation group" in order to continue operations with a net loss of €1.6bn (US$1.5bn) in 2021. Throughout the pandemic, the Portuguese government has provided the TP with €2.55bn (US$2.55bn) in aid.
One of TP's main selling points for potential airline investors is its flights to Brazil. TP is the biggest European provider to Brazil. However, in 2015, when the carrier was up for sale, European carriers had little interest in the airline.
Other options for potential airline investors in TP include Lufthansa (LH) and IAG. Deutsche Lufthansa AG owns carriers, including Lufthansa, Swiss International Airlines (LX), Austrian Airlines (OS), Brussels Airlines (SN), and Eurowings (EW). LH may be interested in TP after losing out in the bidding war for Italian carrier ITA Airways (AZ) to Air France-KLM and US-based Cerberus Capital Management.
Earlier this year, the Lisbon-based carrier stated that a new investor would allow the carrier to be on more solid footing as it continues with its restructuring plan. TP had positive HY22 operating results, as Minster Santos stated in Parliament, "a telling sign that the restructuring plan is being carried out effectively."
Featured image: TAP and Air France tails. Photo: João Pedro Santoro/Airways
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