Portugal Relaunches TAP Privatization: Are We Throwing Millions Down the Drain Again?
The Portuguese government has decided to relaunch the long-delayed privatization of the national airline TAP. The plan is to sell 49.9% of the shares, including 5% to employees. Prime Minister Luis Montenegro stated that they have already spent a lot of money and do not want to continue throwing money into a bottomless pit.
TAP lost a record €1.6 billion during the COVID-19 pandemic and has been losing money for the past three years. The privatization was previously announced but was halted after the fall of the minority center-right government in March. The new coalition is in power but still lacks a parliamentary majority, which could block the sale.
Three major European airlines — Lufthansa, Air France-KLM, and IAG — have shown interest in TAP. The government wants a strategic partner who will ensure the company’s sustainability and profitability and contribute to Portugal’s economic development.
TAP is crucial for Portugal, with important flights to Brazil, Portuguese-speaking African countries, and the USA. However, with losses of €1.6 billion, the question remains how sustainable this national pride is.
Privatization is often seen as a rescue for state-owned companies in losses, but will this be the case with TAP? Will new owners take on the losses, or will the situation improve? What will happen to employees and services?
Portugal has already spent a lot of money on TAP and is now preparing to sell almost half of the shares. Will this bring profitability or be another example of public money being thrown out the window? The answer depends on the choice of a strategic partner and political will in Lisbon.
What do you think? Is TAP’s privatization a rescue or a failure? Share your thoughts and join the conversation!
