Lufthansa to transfer up to eight A350s to TAP after 2030
Lufthansa Group plans to transfer up to eight A350-900s to TAP Air Portugal (TP, Lisbon) after 2030 as part of its proposed acquisition of up to 49.9% of the Portuguese flag carrier.
TAP aims to grow its fleet to 117 aircraft by 2035 and 130 thereafter, requiring an estimated EUR3-4 billion euros (USD3.5-4.5 billion) in fleet investment.
This was confirmed by the Portuguese government when it announced Lufthansa Group's selection as TAP's strategic partner on October 14, 2026. Lufthansa's current fleet includes thirty-one A350-900s, with 14 more due to be delivered (plus fifteen A350-1000s).
The government did not specify whether those aircraft destined for TAP would come from the existing fleet or from future deliveries. The A350-900 would become TAP's largest aircraft type and its first A350 variant. TAP's widebody fleet is currently built around the A330-900N, of which it operates 19 with two more due for delivery.
The deal involves Lufthansa Group acquiring an initial 44.9% stake for EUR1.025 billion (USD1.15 billion), potentially rising to 49.9% for up to EUR1.2 billion (USD1.34 billion). Up to 5% of TAP's shares are reserved for employees.
Lufthansa also submitted a non-binding proposal for a potential subsequent acquisition of the remaining shares, which would see the Portuguese state receive a stake of up to 5% in the German airline group. The second phase remains subject to negotiations.
The initial transaction is expected to close in the first half of 2028, subject to European Commission regulatory approval.
Attractive acquisition
Speaking during a conference call on October 15, Lufthansa Group CEO Carsten Spohr described TAP as an especially attractive acquisition because it is already profitable. He described the airline as having a more profitable current margin than the group's existing airlines, crediting TAP's fleet and management.
He said the deal would create "immediate value for our shareholders due to the fact that we are buying a profitable airline. This is the first time ever [that] we are buying a profitable airline. I think any other airline which we have acquired over the years usually had to be turned around by us," he quipped.
"This acquisition fits in many, many ways," Spohr said, citing Lufthansa Group's strategy of expanding internationally and reducing its reliance on production in Germany. He described TAP as a key addition to the group's multi-hub network, with Lisbon providing a western and southern European gateway to Brazil and other Latin American markets. Porto also offers opportunities for growth to North America and Brazil, he added.
Lufthansa Group currently routes passengers from France, Spain, and Portugal travelling to Brazil through its Frankfurt International, Munich, and Zurich hubs. Integrating TAP would allow more of that traffic to be routed through Lisbon, creating additional value for the group, while TAP could feed passengers into Lufthansa Group's hubs for onward connections to Asia and other destinations.
The acquisition would bolster Lufthansa's position in the South Atlantic market. Spohr said Lufthansa currently has a 9% share of the market between Europe and Latin America, ranking sixth among operators. Combining its network with TAP's would increase the group's share to 20%, putting it on a par with IAG International Airlines Group, its main competitor.
Funding and returns
CFO Till Streichert disclosed that the initial acquisition would be fully funded from Lufthansa Group's available cash, with no equity issuance required, and that it would not compromise the group's commitment to maintaining an investment-grade credit rating.
Lufthansa Group expects up to EUR450 million (USD503 million) in annual net synergies from the proposed acquisition, including network optimisation, commercial cooperation, procurement, maintenance, MRO, and cargo, with the majority accruing to the Portuguese carrier.
It expects the transaction to be earnings-per-share accretive in the first full year after closing and generate a double-digit return on capital employed (ROCE). Lufthansa expects to realise about two-thirds of the identified synergies within three years, with the full benefits taking about four years. Streichert said the investment case did not depend on Lufthansa Group obtaining majority ownership, with a future increase in its stake providing an additional upside.
Control and connectivity
Despite holding less than 50%, Lufthansa would have joint control with the Portuguese government through qualified-majority provisions. Lufthansa would nominate three members of TAP's four-person executive committee, while the government would nominate the fourth. The government would retain five of the nine board seats.
The Portuguese government has said the transaction, including future dividends and potential appreciation of its Lufthansa Group shareholding, could allow it to recover the EUR3.2 billion (USD3.6 billion) it invested in TAP over the past decade.
Meanwhile, Madeira's regional government has urged the Portuguese state to ensure that TAP maintains air links to Madeira and the Azores following privatisation, warning that the sale must not compromise territorial connectivity, Diário de Notícias Madeira reported.
Lufthansa Group plans to transfer up to eight A350-900s to TAP Air Portugal (TP, Lisbon) after 2030 as part of its proposed acquisition of up to 49.9% of the Portuguese...
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