The IAG airline group is already in the running to enter the capital of one of the last major European airlines that flies freely and with 100% public capital, the Portuguese TAP. Him holding company which includes Iberia, British Airways, Vueling and Aer Lingus, confirmed this morning the sending of a signal of interest to Lisbon, thus joining the fight opened this week by Air France-KLM and in which Lufthansa subsequently also entered. However, reservations remain at IAG’s London headquarters before making a binding offer: “IAG confirms that it has submitted a declaration of interest to Parpública (the Portuguese entity coordinating the sale), in relation to the Portuguese government’s process for the partial privatization of TAP. However, several conditions will need to be met before IAG can propose an investment.”
For months, and until the last moment, IAG has been in contact with the Portuguese authorities to clarify the scenario of a privatization which will begin with the sale of 44.9% of the capital and which will reserve 5% for employees. The State will retain the majority of the shareholders, even if it is open to giving weight in management to the incoming shareholder and, furthermore, to subsequently advance in the placement until the majority is transferred to private capital.
It is understood, therefore, that there may be doubts about the governance of the company, the public aid debt, the planned investment plans and the rights of the new investor in the subsequent stages of privatisation. IAG has left the door open in case details like these end up being inaccessible.
TAP’s market share in connections with Brazil, with 25% among European airlines, is the main attraction of a company that survived the scourge of the pandemic thanks to the injection of 3.2 billion in public money. The Portuguese government’s intention is to recover part of the ransom, knowing that TAP’s valuation is well below that figure, which has motivated a long political debate. The process starts from a valuation of 700 million for 44.9% for sale.
“We believe TAP has significant potential within IAG. Our decentralized model offers industry-leading margins and aligns with the Portuguese government’s ambition to protect TAP. Our track record demonstrates how we invest to strengthen our airlines, for the benefit of customers, employees, local economies and shareholders,” says IAG, alluding between the lines to Iberia and British’s development from critical situations at the start of the last decade.
For IAG, as for its competitors, it is also essential to gain positions on the map of the old continent. TAP offers dominance in Lisbon and Porto, two of the strongholds that escape the control of the three conglomerates that want to buy the airline.
Strategic location
Him holding company led by Luis Gallego dominates the Atlantic front with Aer Lingus in Dublin, British Airways in London and Iberia in Madrid. It’s even empowering low cost Level at El Prat airport, operated by Vueling, to connect Barcelona with America. IAG does not want enemies in its natural territory. But it’s a position that both Air France-KLM and Lufthansa, strong in Central Europe and expanding, are trying to iron out. The former took command of the Scandinavian SAS, the latter of the Italian ITA. IAG, meanwhile, failed last year in its second attempt to acquire Air Europa to become untouchable in Madrid.
Chief executive Gallego insisted to the media at the presentation of its third quarter results that IAG has the financial capacity to undertake investments without penalizing its target debt-to-gross operating profit ratio and increasing shareholder remuneration. Previously, in an interview with EL PAÍS at the beginning of October, he underlined that the inclusion of TAP in IAG is, from the point of view of competition regulation, better than in the other two large conglomerates in the airline sector.
As for the weapons available to attack TAP’s target, IAG’s net financial leverage has fallen to 0.8 times (1.1 in December 2024), with net debt slightly higher than 6,000 million (-1,508 million compared to the end of 2024). This position is currently below the 1.2 to 1.5 range that IAG has set as a guide for getting excess cash to shareholders.
With margin for corporate operations, the company announced a cash dividend, based on 2025 results, of 0.048 euros gross per share (0.0389 euros net). This figure, which will be distributed on December 1st, exceeds last year’s €0.030. And additional compensation will be added to it once the current year’s results are published, around February 2026. A new share repurchase plan is expected once the current one valued at 1,000 million is closed.
Waiting for other players
The Portuguese government has set Saturday 22 November as the deadline for receiving proposals, so there is room for new registrations. Among the administration’s requests is that potential buyers have an income exceeding 5 billion. The first commitments that arrived were treated with friendly tones: for the future the TAP brand will be maintained, the operational headquarters will remain in Lisbon, there are commitments to preserve employment and strengthen current routes.
The airline for sale announced this week a first nine-month profit of 55.2 million euros, 35% less than the same period in 2024. The third quarter ended with a profit of 126 million, while capacity measured in seats increases by 3% so far this year and the number of travelers increases in the same terms, to 12.7 million.
TAP management, led by CEO Luis Rodrigues, estimates that the process of acquiring a capital partner will last several quarters, during which efforts will be made to strengthen the company’s financial sustainability.
