The planned privatization of TAPPortugal has been in process for years. Strangely enough, even though the airline’s financial performance has deteriorated of late, the chances of sealing a deal appear better this time around.
The current privatization attempt is livelier than in 2012, when Avianca co-owner German Efromovich submitted the only bid—via his Synergy Group. This time bids came in from a consortium led by the founder and CEO of Brazilian carrier Azul, David Neeleman, who teamed up with the Portuguese transport group Barraqueiro and at least three other investors. Efromovich, too, bid again even though he recently stated he no longer was interested. A third offer was submitted by Miguel Pais do Amaral, founder and CEO of Portuguese investment fund Quifel Holdings.
TAP is one of the last government-owned airlines in Europe. Its strategic position has always been difficult. Portugal’s location in the far west of Europe makes it impossible for the airline to participate in major traffic flows, and its economy was hit hard by the 2008 near-global financial crisis.  The country had to seek protection via the European Union financial stabilization mechanism, and this help came with conditions, including privatization of state-owned companies, TAP among them.
Attempts to sell the airline date back to the late 1990s when then-Swissair parent SAir Group agreed to buy 34% of the carrier. But the Swiss conglomerate went bankrupt in 2001 and TAP continued to rely on government support. The airline had stabilized over the years, thanks to the strong management of CEO Fernando Pinto and a focus on the Europe-Brazil market where the airline benefited from the strong economic growth Brazil enjoyed for years. However, that country’s growth is now stalling and TAP is feeling the effects. The airline posted a net loss of €46 million ($50.4 million) last year, compared to a profit of €34 million in 2013. And Portugal is warning that the airline needs to be recapitalized soon, which adds a greater sense of urgency to the privatization process.
TAP needs fresh capital to support its growth and fleet-renewal plans. It currently operates an all-Airbus fleet. Credit: joepriesaviation.net

But there is no other European airline willing or financially able to acquire the Lisbon-based carrier, underscoring how reliant European air transport has become on foreign investment.