Air France-KLM CEO Ben Smith has confirmed the airline group’s interest in acquiring a stake in TAP Air Portugal, but emphasized that any move would depend on favorable conditions set by the Portuguese government. Smith noted that the group is comfortable using the same strategic approach it followed during its minority investment in Scandinavian Airlines (SAS).
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Air France - KLM GroupAir France-KLM Eyes TAP Portugal with SAS-Style Investment Strategy
Air France-KLM CEO Ben Smith has confirmed the airline group’s interest in acquiring a stake in TAP Air Portugal, but emphasized that any move would depend on favorable conditions set by the Portuguese government. Smith noted that the group is comfortable using the same strategic approach it followed during its minority investment in Scandinavian Airlines (SAS). “The discussions that took place were quite positive,” he said, referring to initial talks around TAP’s upcoming privatization process.
A Flexible Investment Model
Air France-KLM’s approach to TAP mirrors its strategy with SAS—acquiring a non-controlling minority stake while retaining the option for future increases. This model offers flexibility and avoids the regulatory complications often associated with full mergers or majority takeovers. The group currently holds a 19.9% stake in SAS, and may seek a similar arrangement with TAP.
Smith highlighted the benefits of this approach, which allows the group to support commercial and operational integration without triggering lengthy EU antitrust reviews. The model also grants the local government reassurance that national identity and local operations will be preserved.
Government Conditions and Strategic Appeal
The Portuguese government is preparing TAP for partial or full privatization. Although timelines may shift due to political changes, Air France-KLM is keeping its options open. Smith emphasized that the airline group will only proceed with a bid if the terms align with its long-term strategy.
One of TAP’s biggest draws is Lisbon’s geographic advantage as a transatlantic hub. The city serves as a vital link between Europe and Brazil, the United States, and several Portuguese-speaking African nations. These long-haul connections complement Air France-KLM’s existing network, centered around Paris and Amsterdam.
Smith reassured stakeholders that, if successful, TAP’s brand and operations would remain intact. The airline’s identity, workforce, and strategic international routes—particularly in Latin America and Africa—would be preserved.
Alignment on Sustainability
In addition to commercial interests, Air France-KLM is exploring opportunities to deepen its presence in Portugal through sustainability initiatives. The group has been engaging with local players in Lisbon to develop a pipeline for sustainable aviation fuel (SAF). Air France-KLM is currently Europe’s largest user of SAF, having consumed around 80,000 tons in the past year—representing about 1% of its total fuel usage.
Smith explained that building industrial partnerships around SAF not only aligns with environmental targets but also supports broader economic cooperation with Portugal ahead of any formal deal for TAP.
Strategic Context: TAP and the Iberian Focus
Air France-KLM’s interest in TAP is part of a wider strategy to strengthen its presence in the Iberian Peninsula. The group is also in active discussions to acquire a stake in Air Europa, another Spanish carrier. These investments support a regional diversification plan aimed at bolstering the group’s transatlantic and Latin American operations.
Smith noted that Air France-KLM’s cooperative relationship with the French and Dutch governments has helped streamline strategic investments. A similar alignment with Portugal would further reinforce the group’s standing in southern Europe.
What’s Next
Air France-KLM’s potential bid for TAP Air Portugal could reshape the European airline landscape. If successful, the deal would extend the group’s reach into crucial transatlantic and South Atlantic markets, while offering TAP stability and access to broader resources.
Rather than pushing for full control, Air France-KLM’s bid would likely focus on long-term strategic alignment, gradual integration, and mutual benefit. It’s a move that signals a new era in European airline consolidation—one that favors agility, partnership, and sustainability over traditional mergers.
Source: GLO
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