LIVE MARKETS-TAP steps into Europe's big airline dance

Updates with Airlines post

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TAP STEPS INTO EUROPE'S BIG AIRLINE DANCE

Europe's airline ballroom has a new star. TAP Air Portugal is gliding into the spotlight as analysts at Bernstein call it "the next big deal in European aviation," with a sale likely in 2026.

Unlike recent takeover targets like ITA and SAS, TAP isn't limping to the floor; it's already profitable, posting a 9% EBIT margin in 2023 and 2024. Its secret? A smart focus on the Europe–Brazil corridor, where it holds a commanding 22% market share, second only to LATAM. More than half of TAP's long-haul flights serve Brazil, a market buoyed by leisure and diaspora travel.

The Portuguese government currently owns TAP outright but plans to sell 49.9% of the airline, 44.9% to investors and 5% to employees while keeping majority control at 50.1%.

The price tag is steep: at least EUR 700 million ($810.81 million) for a 45% stake, valuing TAP at €1.5 billion ($1.74 billion) in equity and €3.8 billion enterprise value. Bernstein calls this "a full valuation," roughly 25–30% above peers, but says the strategic upside makes it worth the premium.

Who's most likely to buy? Bernstein tips IAG as the front-runner after dropping Air Europa. "IAG has the strongest case to preserve TAP's brand and Lisbon hub," analysts note, adding that synergies with Iberia and joint ventures could lift margins to 12–15%.

Bottom line: TAP isn't a turnaround story, it's a growth play. For IAG, this could be the step that fills its Brazil-shaped gap.

(Rashika Singh)

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