One of TAP’s main unions has warned that employees must not once again be left to “rescue” the airline from the consequences of privatisation, while raising concerns over how Lufthansa intends to integrate parts of the Portuguese carrier into its wider group.
The Aviation and Airport Workers’ Union (SITAVA) spoke out this Thursday, one day after the government selected Lufthansa to acquire up to 49.9% of TAP for as much as €1.201 billion. The Portuguese State will retain a 50.1% majority stake during the first phase of the operation.
“Throughout TAP’s history, whenever privatisation, whether total or partial, has taken place, it has been the workers who have ultimately been called upon to rescue the company from the consequences that followed,” SITAVA said.
“Let us hope that the same does not happen in the future, whether near or far,” it added.
The union said it had made its concerns clear to both Lufthansa and rival bidder Air France-KLM during the privatisation process.
SITAVA stressed that, in its view, TAP’s employees were the ones who had “built, maintained and saved” the airline over the years – “not successive governments or business groups”.
“TAP will only have a future if that future clearly and respectfully includes those who, day in and day out, ensure the company flies safely,” it added.
Concern over maintenance operations
The union reserved particular criticism for the possibility of TAP’s maintenance and engineering operations becoming more closely integrated with those of the Lufthansa Group.
“If this goes ahead, it will be a gross mistake,” SITAVA warned. “We shall see if it is not just the first of many.”
The government, meanwhile, argues that Lufthansa’s proposal offers TAP significant scope for expansion while preserving its Portuguese identity.
Its commitments include maintaining the TAP brand and headquarters in Portugal, strengthening the Lisbon hub and expanding the fleet to 117 aircraft by 2035 and 130 thereafter. Lufthansa has also proposed around €300 million of investment and 700 jobs in an aircraft maintenance facility in Santa Maria da Feira.
€1.201 billion offer
Lufthansa’s proposal values the initial 44.9% stake at €1.025 billion, with a further €58 million in adjustments and €118 million attributed to the 5% reserved for employees.
If employees do not take up all of that reserved stake, Lufthansa can acquire the remainder, potentially bringing its shareholding to 49.9% and the total proceeds to €1.201 billion.
Air France-KLM’s corresponding offer totalled €1.038 billion, although it also proposed an additional €100 million payment if TAP met specified financial targets in 2028.
The government said Lufthansa’s bid was up to 16% higher and carried less financial uncertainty, while the strategic and contractual elements of the two proposals had become broadly equivalent during the final negotiations.
Full takeover could follow
There could eventually be a much bigger change in ownership.
Both bidders were required to submit proposals for a possible second phase in which the State could dispose of its remaining 50.1% stake.
Lufthansa offered a further €1.351 billion for that shareholding – €863 million in cash and €488 million through an exchange for Lufthansa shares.
Under that scenario, Portugal would become the second-largest shareholder in the enlarged Lufthansa Group, holding around 5%, while TAP would become fully owned by Lufthansa. The combined offers imply a direct valuation of TAP of around €2.552 billion.
However, that second phase is not yet approved, while the first transaction itself still requires final negotiations and regulatory clearance before completion, expected in 2028.