During a recent Cabinet meeting, Portugal’s government approved the privatization of Tap Air Portugal.
The plan is to sell the airline directly to a private entity.
Authorities will offer at least 51% of the TAP shares acquired in 2020. Additionally, 5% of shares are set aside for employees.
The full sale of the government’s stake is still a possibility.
Fernando Medina, the Finance Minister, confirmed key buyer terms. These will appear in an official document by year-end.
So far, the government hasn’t set a fixed price for the airline.
Early estimates value the company at around one billion euros. Intriguingly, this is a third of the government’s initial investment.
Minister Medina is on the lookout for a specific type of investor. He wants someone from the aviation sector or leading a group of firms.
Before finalizing sale terms, the government will consult stakeholders and industry experts.
Background Tap Air Privatization
This move is a part of a broader trend of privatization across various sectors. Governments often privatize to reduce debt and improve efficiency.
In Portugal’s case, the decision follows a complex airline ownership history. The state re-acquired a significant stake in 2020, and is now ready to pass it on again.
The timing is notable, given the global shifts in the aviation industry. With travel restrictions easing, airlines are recovering.
Thus, the sale could attract investors looking to capitalize on this upturn.
Critics, however, argue that privatization can lead to job cuts and reduced service quality. Yet proponents assert it opens doors for innovation and expansion.
It’s a fine balance; the outcome will likely depend on the chosen buyer.
The set-aside of 5% shares for employees also shows a nod towards equitable practices. This aims to give workers a stake in the company’s future.