'One thing is certain: Portugal would want the buyer of TAP to be a reputable and strong airline.and at the same time enhance not only the Lisbon hub, but also other airports like Porto,' the source with knowledge of the Portuguese government's position said. The other two bidders in play also have strong advantages for TAP. How it manages to negotiate across Swedish and Danish cultures with less than a 20% stake remains to be seen. private equity giant Apollo Global Management, which last year provided SAS with $700 million in bridge financing and had bid to take a majority stake in the airline, faced European Union rules preventing non-EU investors from taking control of an airline.Įurope's airline industry has a history of cultural and political barriers to smooth integration, even within Air France-KLM itself. A hiccup could drag down the process for the TAP talks, too. There are remaining challenges for Air France-KLM as it looks to clear regulatory hurdles with SAS, including approval from American and European policymakers. 'The effective work to understand which airlines are truly interested, the real market appetite, and the strategies of the different players has not yet begun.' LONG FIGHT AHEAD 'Everything is still at a very, very early stage,' a source with knowledge of the matter told Reuters. With the process still in its infancy, Air France-KLM has a chance to make a pitch to TAP now off the back of SAS. 'TAP's priority is the 'integrity' of TAP, which would probably have its best chance of success in an Air France-KLM partnership,' an investor source said. Portugal's government is keen to find a partner that will allow it to save its struggling airline without losing its branding, local hubs and national Portuguese identity.Ī more hands-off approach could be the golden ticket to tapping into TAP's lucrative south American connections, analysts and investors say.

Now, they're trying to repeat their success, poaching another Star Alliance member away from Lufthansa with TAP but facing a higher price and fierce competition.Īir France-KLM reiterated its strong interest in TAP on Thursday, adding the purchase of a stake in SAS did not affect its ability to take part in TAP's privatisation.

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