Portugal has selected Lufthansa Group to acquire a minority stake in TAP Air Portugal, advancing the national carrier's privatization and setting the stage for expanded air service, fleet growth and aviation investment across the country.

The Portuguese government announced Oct. 14 that Lufthansa had defeated rival bidder Air France-KLM with an offer of €1.025 billion ($1.2 billion) for a 44.9% stake. The investment could increase to approximately €1.2 billion ($1.3 billion) if Lufthansa acquires additional shares initially reserved for TAP employees and other transaction adjustments are included.

The government will retain a 50.1% controlling interest in TAP during the first phase of privatization, with the possibility of selling its remaining stake in a second phase.

Lufthansa said the investment would strengthen its presence in the South Atlantic market, particularly through TAP's established network connecting Portugal with Brazil and other destinations in North and Latin America.

TAP carried 16.7 million passengers in 2025 and operates more than 90 aircraft serving destinations across Europe, the Americas and Africa.

The proposed partnership also includes plans for significant fleet expansion and investment in Portugal's aviation infrastructure. Government officials outlined plans to increase TAP's fleet to 117 aircraft by 2035 and more than 130 thereafter, potentially including the transfer of up to eight Airbus A350-900 aircraft beginning in 2030.

The investment strategy also identifies Porto's Francisco Sá Carneiro Airport as an important base for future growth, along with additional development opportunities at Faro Airport and airports serving Portugal's autonomous regions.

Beyond airline operations, Lufthansa's proposal includes investments in aviation training, innovation and corporate services. The company is already developing a Lufthansa Technik maintenance facility in Santa Maria da Feira, near Porto, as part of its broader expansion in Portugal.

Portuguese officials said the proposed investments and TAP's projected growth could support thousands of direct and indirect jobs.

Lufthansa Group CEO Carsten Spohr said the acquisition would build on the company's longstanding relationship with Portugal while preserving TAP's national identity and strengthening international connectivity.

The transaction remains subject to final agreements and regulatory approvals, including review by European competition authorities. Completion is expected in 2028.

The acquisition would represent another step in the consolidation of Europe's airline industry, adding TAP's extensive transatlantic network to a Lufthansa Group portfolio that already includes SWISS, Austrian Airlines and ITA Airways.