Portugal on Thursday gave the go-ahead to the long-planned sale of airline TAP, saying it would prefer a buyer who would maintain its status as the country’s flag carrier.
The privatisation is part of a state property sell-off agreed under a EUR€78 billion EU/IMF bailout for debt-ridden Portugal and has been scheduled to occur this year.
“At stake in this privatisation process is a company with strong links to our country, links that should be maintained,” the cabinet said in a statement after its weekly meeting authorised the go-ahead.
“It is therefore relevant to favour keeping its flag company characteristics.”
A TAP spokesman said: “It is a branding issue to keep a Portuguese brand in the market here and in Portuguese-speaking countries.
“It’s not a legal issue, all the landing rights will go with the company to the buyer.”
The government provided no timeframe for the sale, which it said would involve a capital increase and direct sale of shares to one or more investors, as well as a separate public offering of an unspecified number of shares reserved for employees.
TAP, with a fleet of 55 Airbus aircraft, carried 9 million passengers last year. Analysts say its routes to Brazil — Latin America’s largest country and a former Portuguese colony — make it attractive.
The carrier has attracted interest from several international operators, including International Airlines Group, thanks to its fast-growing routes to South America and Africa.
Lufthansa has said it may be interested in TAP.
The government is also preparing to sell its ANA airport handling company by year-end.
Jornal de Negocios newspaper said on Wednesday the state hopes to obtain over EUR€1.5 billion from the sale of ANA and TAP. The carrier’s sale alone is mostly expected to cover its hefty EUR€1.2 billion debt, but is unlikely to bring a lot of new cash, it said.