The Portuguese Council of Ministers has approved a decree initiating the privatisation of TAP Air Portugal (TP, Lisbon). The government aims to divest a 49.9% stake, including a 44.9% stake to one or more investors, and 5% stake earmarked for the employees.

The Minister of State and Finance, Joaquim Miranda Sarmento, and the Minister of Infrastructure and Housing, Miguel Pinto Luz, presented the government's goals for privatising TAP during a joint press conference on July 10.

The state expects a new strategic partner to preserve the TAP brand, grow the airline's fleet, maintain the route network to Portuguese-speaking countries, and invest in the local sustainable aviation fuel production projects. The investors must maintain operations out of Lisbon and Portugal's secondary airports, such as Porto and Faro.

Lisbon also wants to recoup its Covid-era investment in the carrier, which amounts to EUR3.2 billion euros (USD3.7 billion). The government has recently received two valuations of TAP, but the estimated market value has not been publicly disclosed.

Following the approval of the decree by the Council of Ministers, the document has to be signed into law by the country's president. If the bill is approved, interested parties will have 60 days to prequalify. After that, potential investors will be given 90 days to submit non-binding proposals.

The government expects to finish the privatisation within a year. Portugal will retain the majority ownership of the carrier.

Lufthansa Group, Air France-KLM, and IAG International Airlines Group have expressed interest in acquiring an ownership stake in TAP. Sarmento previously said that Lisbon has no preferred bidder, and will sell the stake to the investor that makes the best offer