Lufthansa TAP Proposal: Minimal Chance of Acceptance – Consultant

Lufthansa‘s ‍TAP Portugal Takeover: A Flight Plan Destined for Turbulence?

lisbon, Portugal – As⁤ the ⁤privatization process for TAP Air portugal continues, a leading ⁢aviation consultant is raising ‍serious doubts about Lufthansa’s commitment to a⁣ binding proposal, suggesting the German giant may be strategically positioning⁣ itself to observe rather than acquire.

Skyexpert, a respected⁢ aviation consultancy, believes there are “minimal chances” of Lufthansa ultimately submitting a binding offer for TAP. Several⁤ factors contribute to this assessment, including potential competition concerns in both Europe and the United States, and Lufthansa’s strategic focus on expanding its stake in Italian airline ITA Airways.

“Lufthansa has already withdrawn ⁤from similar processes without a proposal, as recently happened with Air Europa,” explains Pedro ⁢Castro, director of⁢ Skyexpert.”They will obviously be in this race⁣ for TAP to ‍the end to better understand, in detail, what company its⁢ rivals are buying.”

One ‍key indicator, according⁣ to Skyexpert,⁤ is ⁣Lufthansa’s intention to accelerate its increased participation in ⁤ITA Airways, potentially by 2026. “It is an unmistakable sign that TAP will not be⁤ part of the⁢ German group’s growth strategy,” Castro asserts, noting that Lufthansa’s plan for ITA Airways⁤ specifically targets expansion into brazil and Africa – ⁣markets currently served⁢ by TAP.

Moreover, Lufthansa’s move to centralize all common services for its group companies in Frankfurt, starting in January, presents a significant hurdle. ⁢This centralized model, Skyexpert argues, is “incompatible with the scheduled shareholder ⁣model for semi-public TAP ⁤and the vision of the Portuguese state, a majority shareholder, to maintain the decision center in Lisbon.” The Portuguese⁤ government’s desire to maintain control and decision-making power within Lisbon clashes with lufthansa’s centralized operational approach.

Competition concerns loom large, especially regarding route monopolies. Skyexpert ⁢highlights that a consolidation between TAP ⁣and Lufthansa woudl create ⁣monopolies on key routes such as Lisbon-Brussels, Lisbon-Frankfurt, and Lisbon-munich, and would considerably reduce competition on Lisbon-Zurich, Lisbon-Vienna, and lisbon-Rome connections. This would necessitate the assignment‍ of valuable “slots” at Lisbon’s Portela Airport and destination⁢ airports, potentially undermining the portuguese government’s goal of strengthening TAP’s operations at its home base.

Transatlantic partnerships also present a⁢ challenge. Skyexpert points out that the⁣ Biden and trump administrations have demonstrated sensitivity to US ‍carriers’ concerns ‍regarding⁢ access ‍to congested airports. the consultant notes that⁤ united and Air ‍Canada – Lufthansa’s transatlantic ⁢partners – already have a strong presence ⁢in Portugal, operating nine daily⁤ flights to five national airports. This⁤ contrasts sharply with Delta (in alliance with Air⁤ France-KLM) and American Airlines (in partnership with IAG), which have significantly fewer flights.

Skyexpert concludes that TAP would essentially ‍represent a burden⁣ on Lufthansa, citing financial, organizational, and operational adjustments required to integrate TAP with the rest of its ⁣companies and the Atlantic alliance. The ‍potential impacts on Lufthansa’s reputation, ‍stock, ⁤and ⁣governance, due to the behavior of a majority shareholder, further complicate the picture.

While Lufthansa Technik has recently invested in Portugal, Skyexpert believes this is a separate strategic move and ⁢does not necessarily indicate a commitment to acquiring TAP.

As⁣ the privatization process unfolds,Skyexpert’s analysis suggests that Lufthansa’s interest in TAP may be ⁣more about strategic observation than a genuine desire for acquisition.The challenges posed by competition concerns, conflicting strategic priorities, and the Portuguese government’s vision for TAP’s future ‍may⁣ prove too significant for Lufthansa to overcome.