Why the media should not obsess over TAP part-privatisation absolute price

Lufthansa, IAG and Air France-KLM will pass to the second round in the TAP part-privatisation plan, delivering non-binding bids for the Portuguese national carrier at the end of this week.

Specialists and analysts now say that this phase will allow the public to finally understand the “real market value” of the airline. However, they say that the relative value of the airline rather than the absolute value is of more importance as the big three airline groups fight it out for TAP and its lucrative Brazilian routes.

The three companies will deliver their offers on Friday. Sérgio Palma Brito, an aviation analyst, told the news source SOL that he is not “expecting big surprises at this next phase”

“I am expecting what is laid down in the Decree-Law and as the dossier is not under legal secrecy, there are not likely to be leaks,” he said.

Another airline specialist, Pedro Castro, said that Friday’s step is “relevant” because it would allow the three airline groups to get very detailed information about TAP for the first time as well as giving a concrete indication about the true value of the airline that has been attributed to it by the market.

While a precise market value isn’t public, analysts in late 2025 valued TAP Air Portugal’s strategic stake for privatisation at around €700 million (over $800 million USD), based on an estimated full valuation of €1.5Bn, with potential bidders like Air France-KLM, IAG, and Lufthansa clearly showing interest in the privatization process, aiming to acquire a minority stake while Portugal retains majority ownership. TAP is a profitable, strategically important airline, particularly for the Brazil market, making it attractive despite recent minor cost increases.

After studying the non-binding offers, the airline groups will then be invited to the next phase which will be the biding offers.

“The debate has been rather excessively centered around the absolute value of the airline, when with this type of international transaction, the deciding factor is nearly always the relative value.

That means a value based on the potential synergies that could be created in terms of costs. It also means the value based on restrictions imposed by competition authorities.

“This relative value varies depending on the aviation group involved, its composition, the dominant position that it holds, and the way in which it integrates its various companies within the group.”

Palma Brito has doubts as to the value at which TAP could be sold. “I think it will be less than the dreamers hope for and more than the pessimists think,” he said.