The privatization process for TAP Air Portugal risks being held up by political changes in the country, Portuguese media has reported, as political uncertainty puts strategic projects on hold.
Antonio Costa resigned as Portugal’s prime minister Nov. 7 over an investigation into corruption allegations. Costa’s surprise resignation could mean a delay for the privatization process, which was only formally launched at the end of September.
Selling a stake in TAP—which has been undergoing restructuring—to an investor has been an ambition of the Portuguese government for some time, but strategic, long-term plans are likely to be delayed by the political uncertainty.
A decision on long-awaited plans for a new Lisbon airport could also be held up, Portuguese news agency Lusa reported.
Portugal’s government announced formal plans to sell at least a 51% stake in TAP Air Portugal Sept. 28. Finance Minister Fernando Medina said at the time that the council of ministers had approved the decree launching the privatization process and the government would be looking for an investor that could help TAP grow and conserve the country’s national hub.
Portuguese President Marcelo Rebelo de Sousa, meanwhile, in an Oct. 27 statement asked the government for clarification on the TAP privatization plans, citing three aspects he considered “essential:” the state’s ability to monitor and intervene in a strategic company; the issue of selling or acquiring assets even before privatization; and the transparency of the entire operation.
Air France-KLM, Lufthansa, and IAG have all expressed interest in TAP, which is prized in part for its well-located Lisbon hub and its extensive long-haul network to Brazil and elsewhere in South America.
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