According to a resolution from the Council of Ministers on 4 September, the government wants Air France-KLM and Lufthansa to improve their offers to acquire up to 44.9 percent of TAP and has therefore extended the deadline for privatising the national airline until the end of the year.

The resolution indicates that the executive decided to "extend [...] the deadline for the direct sale process until December 31, 2026, in order to allow the conclusion of the negotiation phase and the presentation of final and improved binding proposals," Publituris reports.

Following the Council of Ministers meeting, the Minister of the Presidency, Leitão Amaro, revealed that despite the offers being different, they have a "very similar overall evaluation."

Amaro said the proposals are "globally so similar that the best course of action for the national interest is to have an additional, final phase of negotiation with both candidates.”

Final negotiations with both bidders

The resolution states that Parpública will invite each of the bidders to participate in the final negotiation stage, and the final negotiation period is expected to last three weeks.

It is now up to the selected members of the Government, who are responsible for the areas of Finance and Infrastructure, to "adjust, during the negotiation phase, the deadline for submitting the final and improved binding proposals.”

The TAP privatisation process foresees the sale of up to 49.9 percent of TAP's capital, with 5 percent reserved for employees. The selected investor will potentially acquire the unsubscribed portion under a right of first refusal, Publituris reports.

Further approvals still required

On July 29, the last day of the deadline set by the Government, Air France-KLM and Lufthansa submitted their binding proposals. Additional steps will still be necessary before a final decision can be reached, including approval by the Council of Ministers and obtaining the green light from European competition authorities.