TAP Air Portugal bought by Lufthansa?

Lufthansa seems not to have had enough yet. After the takeover of Swiss and Austrian and the failure (for now?) of its desire to get its hands on Alitalia, it is now TAP Air Portugal that is in its sights.

Today the Portuguese airline is owned since 2015 at 45% by a consortium, the state holding 50% but letting the consortium manage the airline (the remaining 5% belong to employees. But even if since then the airline has greatly improved its product, its fleet and offers very attractive prices, the state does not like the losses it continues to record (€106M in 2019).

The state is looking for a new partner

The State is therefore in discussion with the consortium led by David Neeleman, founder of JetBlue and Azul, which will soon launch a new airline called Breeze in the USA, and would ask him to sell his shares to partners better able to restructure the airline.

And in Europe, when we talk about successfully restructuring an airline we think about… Lufthansa Group !

Discussions have already started with the German group and it is said that United would even participate in the deal. This is the most credible statement, even if there are also denied rumors of discussions with Air France-KLM or IAG.

We think that IAG is already too busy with the acquisition of Air Europa, but for Air France-KLM and Lufthansa this would make a lot of sense, certainly more than going into the Alitalia mess. On the other hand, Lufthansa has the means for such an acquisition and has a proven track record in turning around businesses. It is not certain that Air France-KLM’s finances would allow it, nor that the Franco-Dutch group would not prefer to focus on its own recovery today.

What are the consequences of the takeover of TAP by Lufthansa?

It’s far too early to know how solid the rumor is and where the discussions are at, but we can already draw some perspectives.

First of all, this integration would be facilitated by the fact that both airlines are members of Star Alliance and already have codeshare agreements.

This would also secure the alliance’s presence in this part of Europe, knowing that Air Europa is no longer for sale and that there is only one airline (TAP) left to “seduce” for two alliances. A departure of TAP to Skyteam would certainly not be well received.

Given the respective sizes of the two airlines, we can expect Lufthansa to see in TAP the ability to supply its Frankfurt and Munich hubs, even if it means that TAP’s long-haul offer will stagnate or even be reduced. Not sure that the Portuguese travelers find their interest there…

Last but not least, this would mean the arrival of TAP in the Miles&More frequent flyer program, whose scale seems to be unsuitable for Portuguese customers, so many members with Star Alliance Gold status in TAP’s Miles&Go program would not be able to keep it in Miles&More. Indeed, the Senator status giving the famous Star Alliance Gold is obtained with 100,000 miles per year while the TAP Miles&Go Gold is obtained with 70,000 miles and is renewed with 50,000 miles! The loyal TAP customer would largely lose out.

A case to follow with attention.

Photo : A330Neo Air Portugal by Matheus Obst via Shuttertock

Bertrand Duperrin
Bertrand Duperrinhttp://www.duperrin.com
Compulsive traveler, present in the French #avgeek community since the late 2000s and passionate about (long) travel since his youth, Bertrand Duperrin co-founded Travel Guys with Olivier Delestre in March 2015.

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