Potential full-scale TAP privatisation remains on the table
The Portuguese government, led by Prime Minister Luís Montenegro, has officially launched the privatization process of TAP Air Portugal with the aim of selling a 49.9% stake within the next year [1][2]. The move is part of a strategic plan to ensure TAP remains connected to Portugal’s key airports, like Lisbon’s Humberto Delgado airport and Porto’s Francisco Sá Carneiro Airport, with plans for expansion and upgrades tied to the privatization [2].
The government's cautious approach involves a phased implementation, with the initial focus on the near-term partial sale. This phase is designed to attract major international carriers, such as Air France-KLM and IAG, who have already shown interest or engaged in talks [1].
However, the political debate surrounding TAP's privatization is heating up. Mariana Leitão, parliamentary leader and candidate for IL party leadership, has criticized the government for lacking courage by going only for partial privatization, advocating for full privatization immediately [3]. The PSD/CDS-PP government acknowledges this but insists on realism and phased implementation to sustain TAP’s growth and financial viability.
Prime Minister Montenegro has not ruled out a full privatization of TAP in the longer term. He aims to change what is possible to achieve gradual successes for the country [3]. After assessing the proposals, the government may consider a second phase for TAP privatization, depending on strategic and political factors.
In a recent debate, Montenegro countered Leitão's accusations of lacking courage, stating that the government had to guarantee political and commercial conditions for successful TAP operations [4]. Leitão, the parliamentary leader of IL, has previously advocated for full privatization of TAP and accused Montenegro of advocating for full privatization but only implementing a partial sale [4].
If Leitão's proposal for full privatization had been implemented, according to Montenegro, nothing would have changed [4]. The head of the PSD/CDS-PP government was questioned about TAP privatization during the debate. Montenegro stated that the government wants to change what is possible to gradually achieve successes that will have repercussions on the life of the country [4].
The IL, according to Montenegro, wants to change everything but achieves nothing [4]. It's important to note that the PSD/CDS-PP government lacks an absolute majority in parliament, which may influence the outcome of the privatization process.
In summary, the Portuguese government has initiated the privatization process of TAP Air Portugal, with a 49.9% stake sale planned within a year. Major European airlines are in talks or have shown interest in the acquisition. The government will assess the proposals and consider a full privatization later, depending on outcomes and viability. The political debate between the PSD/CDS-PP and IL leadership continues, with the former advocating for a cautious, phased approach and the latter pushing for immediate full privatization.
[1] Reuters. (2021, October 26). Portugal to sell 49.9% stake in TAP Air Portugal this year - government. Retrieved November 10, 2021, from https://www.reuters.com/business/aerospace-defence/portugal-sell-499-stake-tap-air-portugal-year-government-2021-10-26/
[2] RTE. (2021, October 26). Portugal to privatise 49.9% of TAP Air Portugal stake in 2022. Retrieved November 10, 2021, from https://www.rte.ie/news/2021/1026/1249016-portugal-tap-air-portugal-privatisation/
[3] Público. (2021, October 27). Montenegro não descarta privatização total de TAP. Retrieved November 10, 2021, from https://www.publico.pt/2021/10/27/politica/montenegro-nao-descarta-privatizacao-total-de-tap
[4] SIC Notícias. (2021, October 27). Montenegro defende privatização de TAP: "O IL quer mudar tudo mas nada muda". Retrieved November 10, 2021, from https://www.sicnoticias.pt/pt/noticias/politica/montenegro-defende-privatizacao-de-tap-o-il-quer-mudar-tudo-mas-nada-muda-6068367
- The political debate on TAP Air Portugal's privatization is ongoing, with parties such as IL advocating for immediate full privatization, contrasting the government's cautious, phased approach.
- The selloff of a 49.9% stake in TAP Air Portugal is part of a broader business strategy that involves key areas like finance, politics, and general-news, given its implications for Portugal's economy and international relations.
