TAP Portugal privatisation. Will TAP be back in the shop window soon?

The Portuguese government's decision in late 2012 to reject the only second round bid it had for TAP Portugal cast doubts over the future for the loss-making and indebted Portuguese national airline group.

The government reportedly said it had a 'Plan B', involving shutting down and re-launching the airline after assuming its debt. German Efromovich, owner of Synergy Aerospace (the rejected bidder) has said that he remains interested until the end of 1Q2013 and there have been some suggestions that the government may be planning to re-start the privatisation process.

While a number of major airlines were reported to have considered bidding for TAP in the early phases of the process, including IAG, Air France-KLM, Lufthansa, Turkish Airlines, Qatar Airways and LATAM Airlines, none did so.

TAP's strengths on routes to Latin America (in particular Brazil) and Africa should appeal to prospective bidders, but the group's financial position may continue to offset this without some restructuring. Moreover, growing LCC competition in Europe may eventually undermine all-important feed into its key long-haul niches.