TAP Air Portugal sale talks extended with two bidders

Portugal will continue talks with both Air France-KLM and Lufthansa on the privatisation of a controlling stake in TAP Air Portugal, the government said Friday.

The government had been expected to announce its choice to take over the airline. Government spokesman Antonio Leitao Amaro said after a government meeting that the two aviation groups' offers were very close and that further talks made sense to seek improvements.

The talks could last several weeks. After that, the government plans to choose one of the two contenders and hold final negotiations.

Portugal intends to sell up to 49.9 percent of TAP Air Portugal to a strategic investor, with staff to hold five percent.

Air France-KLM said it would participate in the new round of negotiations and expressed its "steady and determined" interest in becoming TAP's controlling shareholder. The company said its July 29 offer covered TAP's passenger transport, cargo, loyalty programme and aircraft maintenance businesses.

TAP was renationalised in 2020 to stem losses from the Covid-19 pandemic. It is among the few remaining state-owned carriers in Europe. The airline has around 7,700 employees and a fleet of around 100 Airbus planes.