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Portugal’s government wants to sell at least 51% of the state-owned airline TAP to develop the national aviation sector, Finance Minister Fernando Medina announced on Thursday.

Medina said bidders must be sector players with relevant scale, and it looks like he might get his way. Three of Europe’s biggest airline groups – Lufthansa, Air France-KLM, British Airways and Iberia owner IAG – have expressed their enthusiasm.

A spokesman for the Franco-Dutch airline holding said the group had a “strong interest in the privatisation of TAP” and was awaiting details.

In the same vein, IAG’s CEO Luis Gallego said in Lisbon on Wednesday: “We’ll have to study the process carefully, but we feel optimistic and believe that TAP can become another success story within IAG”. The chief executive was in the Portuguese capital for the World Aviation Festival.

Lufthansa also sees an interesting opportunity here. In a statement to the French news agency AFP, the German company said the two airlines could complement each other “very well, particularly thanks to TAP’s network of routes to and from South America,” where the market is growing.

According to global data and market insights platform Statista, revenue in the flights market in South America (which considers all trips booked by users from the region) is expected to reach almost €23 thousand million this year, rising to €26.8 thousand million by 2027.

In fact, the Finance Minister pointed out there was value in TAP’s “privileged connections” to the Portuguese-speaking countries, such as Brazil, South America’s largest nation.

Throughout its history, the Portuguese airline has alternated interminably between public and private ownership. It was last privatised in 2015 and nationalised in 2020 when the state became the owner of 72.5% of its capital. At the time, TAP was valued at €244.4 million.

Last year, the carrier, which is being restructured under a Brussels-approved bailout, broke out a four-year streak of losses with a €65.6 million profit. More positive results are expected this year.

The exact stake to be left in state hands is yet to be determined. The government plans to approve the full privatisation dossier with the terms and conditions by the end of the year and complete the process by mid-2024, Medina added.