One of the longest-running airline privatisation processes has finally been concluded, with Lufthansa Group emerging as the preferred bidder for TAP Air Portugal with a cash offer of € 1.2 billion for a 44.9% minority share of the airline. It might seem a high price to pay for a minority stake in an airline group where parts of the leading airline are still struggling to recover long after the global pandemic five years ago. But how does this acquisition alter the European aviation landscape, if indeed it does?
Adding To the Lufthansa Group
At a simple level, acquiring TAP Air Portugal adds another European airline to the group, and collectively the new group now holds a 9.5% share of all European capacity, compared to the current 8.4%. So while it adjusts capacity share, it is certainlynot a significant change.
Within the group, the newly adjusted capacity shares see Lufthansa’s share slipping back to 40.6%, although they remain the largest carrier with nearly three times the capacity of second-placed SWISS. TAP Air Portugal and ITA Airways both hold a 12% capacity share, slightly behind the 13% share that Austrian Airlines holds.
Current capacity share of Lufthansa Group airlines, 2026
Group share of European capacity: 8.4%
Future capacity share including TAP Air Portugal, 2026
Group share of European capacity: 9.5%
Source: OAG Analyser, scheduled seat capacity from Europe, 2026.
More strategically, TAP Air Portugal provides a position for the group on the western edges of Europe and a “bridge” to Latin America, or more specifically Brazil.
TAP holds a 24% share of all capacity from Europe to Brazil, behind only LATAM. TAP’s strength has always been the Europe to Brazil market, and for Lufthansa the addition of the leading carrier in that market gives the group a 36% share of Europe to Brazil capacity.
A Defensive Position In Lisbon
There's no clear conclusion to be drawn yet about a new airport in Lisbon, with no nope of this happening until at least 2034 and the planning application not expected until 2028. The current facility at Portela is at capacity and TAP naturally have the largest share of 49% of scheduled flights at Lisbon. The enlarged group will hold a 52.5% share.
No Change To Alliance Structures
When it comes to global alliances, acceptance of the Lufthansa Group's offer means no changes and avoids the movement of a carrier from one alliance to another.
Star Alliance holds a 52.7% share of Lisbon capacity, some ten times larger than SkyTeam, while OneWorld have a 4% share of the capacity. TAP holds an 87% capacity share of the Star Alliance presence in Lisbon.
And Limited Scope for Network Expansion
Airline acquisitions are frequently built on the potential for cost and operational benefits, and this would seem to be the case here.
TAP Air Portugal exclusively fly Airbus aircraft while Lufthansa’s fleet is 83% Airbus, ITA Airways are also a 100% Airbus client, and SWISS are a majority operator of the manufacturer’s equipment. All of which could allow for significant cross-use of resources and knowledge sharing.
Ultimately, the pursuit of TAP Air Portugal was a two-horse race once IAG were out of the picture. Air France/KLM will obviously be disappointed at the outcome, but only time will tell how disappointed; achieving the cost and network efficiencies that are part of the due diligence process can be time-consuming and frequently fail to deliver on the initial promises. Time will tell and we will be following with interest.
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