Air France-KLM has submitted its final, revised offer to acquire a stake of up to 49.9 percent in TAP Air Portugal, proposing to establish Lisbon as the Franco-Dutch airline group’s exclusive Southern European hub.

The September 30, 2026, submission to the Portuguese state holding company Parpública marks the culmination of a highly competitive bidding process. According to a press release issued by Air France-KLM, the proposal is backed by SkyTeam alliance partner Delta Air Lines (DL) and outlines a comprehensive strategy to integrate the Portuguese flag carrier into its global network while preserving the airline’s national identity.

A five-point strategy for Lisbon and beyond

Air France-KLM (AF/KL) detailed a five-point strategic plan designed to secure the approval of the Portuguese government. The proposal centers on maintaining the distinct Portuguese identity of TAP Air Portugal (TP), developing Lisbon Airport (LIS) as an exclusive Southern European hub, and significantly expanding transatlantic connectivity.

The plan emphasizes collaboration with the approximately 9,000 employees currently working for TAP. The bid also proposes combining existing assets across passenger, cargo, loyalty, and Maintenance, Repair, and Overhaul (MRO) operations to generate structural efficiencies.

“Our interest in TAP is stronger than ever, and we are excited to present this Final Offer for up to 49.9% of TAP. Over the past four weeks, our team plus our advisors have worked diligently to strengthen our bid, and I am convinced that this revised proposal is the best path forward for TAP, its management, its employees and its customers, as well as for Portugal,” said Benjamin Smith, CEO of Air France-KLM.

Smith noted that the long-term strategic plan is designed to safeguard Portugal’s connectivity and sovereignty while creating job and value growth throughout the country.

The bid received formal backing from Delta Air Lines and the broader SkyTeam alliance. The partnership with Delta would provide TAP customers with access to 375 destinations across North America and South America, a key selling point in Air France-KLM’s pitch to enhance Portugal’s connectivity on the North Atlantic market.

The privatization timeline and bidding structure

The Portuguese government officially relaunched the privatization process for TAP in July 2025. The structure of the sale dictates that the state will retain majority control of the flag carrier. The maximum 49.9 percent stake available is divided into two tranches: 44.9 percent is allocated for a strategic airline investor, while the remaining 5 percent is reserved specifically for TAP Air Portugal employees.

Air France-KLM initially submitted a non-binding offer for a minority stake on April 2, 2026. This was followed by an initial binding offer submitted to Parpública on July 29, 2026.

In early September 2026, the Portuguese government invited both Air France-KLM and Lufthansa Group to a supplementary negotiation phase. Authorities deemed the July 2026 binding bids too close to call, prompting the request for improved final offers.

During this supplementary phase, International Airlines Group (IAG), the parent company of British Airways and Iberia, formally withdrew from the bidding process. The withdrawal of IAG left Air France-KLM and Lufthansa as the sole remaining contenders for the stake.

Fleet integration and European market consolidation

TAP Air Portugal operates a primary hub at Lisbon Airport and a secondary hub at Porto Airport (OPO). The airline’s mainline fleet consists of approximately 96 aircraft, operating an all-Airbus lineup that includes the Airbus A320neo, Airbus A321neo, and Airbus A330neo. A regional subsidiary, TAP Express, operates a mix of Embraer and ATR aircraft.

The privatization of TAP represents one of the last major consolidation opportunities in the European aviation market. The continent’s three largest aviation groups have spent recent years absorbing remaining midsize flag carriers. Lufthansa Group recently acquired a stake in Italy’s ITA Airways, while Air France-KLM successfully acquired a stake in Scandinavia’s SAS.

Bidders highly value TAP for its extensive transatlantic network. The Portuguese carrier holds a leading position on routes connecting Europe with Brazil and Lusophone Africa, markets that offer significant growth potential and high yields for the acquiring airline group.

The Portuguese government and Parpública are expected to evaluate the final offers and announce the winning bidder for the partial privatization in mid-October 2026.

AirPro News analysis

We view the acquisition of TAP Air Portugal as the final major chess piece in the current cycle of European airline consolidation. With IAG exiting the process, the head-to-head contest between Air France-KLM and Lufthansa Group highlights the strategic scarcity of independent, mid-sized European flag carriers with strong geographic advantages.

For Air France-KLM, securing TAP is a defensive and offensive necessity. Lufthansa’s acquisition of a stake in ITA Airways significantly expanded the German group’s footprint in Southern Europe. Integrating TAP would allow Air France-KLM to counter that expansion while securing absolute dominance in the Europe-to-South America market. TAP’s structural geographic advantage in Lisbon makes it an ideal connecting point for transatlantic traffic, bypassing the congestion and capacity constraints of Northern European hubs like Paris Charles de Gaulle and Amsterdam Schiphol.

Alaska Airlines and American Airlines announced on September 29, 2026, their intent to integrate the Seattle-based carrier into the Atlantic and Pacific Joint Businesses, a move that will allow Alaska to coordinate schedules and share revenue on transoceanic routes with oneworld alliance partners.

In a press release, Alaska Airlines stated the integration is a core component of its “Alaska Accelerate” strategy, designed to transform the carrier into a more global entity following its combination with Hawaiian Airlines. The airlines anticipate filing for antitrust immunity with the U.S. Department of Transportation (DOT) and international regulators in the coming months.

Strategic expansion under Alaska Accelerate

The announcement coincided with Alaska Air Group hosting its 2026 Investor Day in Seattle on September 29, 2026. During the event, the company entered the activation phase of its Alaska Accelerate strategic plan. First introduced in December 2024, the plan shifts the company’s focus from the integration of Hawaiian Airlines toward investments aimed at building a more global and premium airline.

As part of this initiative, Alaska Airlines has raised its long-haul ambitions. The carrier is now targeting 15 long-haul international routes from Seattle-Tacoma International Airport (SEA) by 2030, an increase from its previous target of 12.

Andrew Harrison, Executive Vice President and Chief Commercial Officer for Alaska Airlines, emphasized the competitive necessity of the move.

“Alaska Accelerate is about building a stronger, more global airline for our guests, and expanding our partnership with American is an important step in that strategy. Joining these joint businesses would put Alaska on equal footing with its competitors by giving our guests more seamless access to international destinations while preserving the care, loyalty benefits and premium experience they expect from Alaska,” Harrison said.

Joint business mechanics and partner alignment

Joint businesses in commercial aviation extend beyond standard alliance codeshare agreements. They allow participating airlines to act as unified commercial entities on specific routes, enabling metal-neutral revenue sharing, coordinated transoceanic schedules, and deep international booking alignment. Implementing these structures requires antitrust immunity from regulatory authorities.

By joining the Atlantic Joint Business (AJB) and Pacific Joint Business (PJB), Alaska Airlines will align commercially with American Airlines and several International Airlines Group (IAG) carriers, including British Airways, Iberia, Aer Lingus, and LEVEL, as well as Finnair and Japan Airlines.

Nat Pieper, Chief Commercial Officer for American Airlines, noted that the expanded partnership enhances a global network that provides customers with greater access and convenience.

Representatives from the international partner airlines echoed the sentiment. Julio Rodríguez Contreras, Chief Commercial Strategy Officer for IAG, stated that Alaska Airlines will further strengthen the partnership and help expand travel options on both sides of the Atlantic. Ross Leggett, Senior Managing Executive Officer and Senior Vice President of Route Marketing for Japan Airlines, added that the expansion will strengthen the combined network between Asia and North America.

Evolution of the transoceanic partnerships

The Atlantic Joint Business was formed in 2010 and has operated across the North Atlantic for 15 years, coordinating service and revenue sharing among its European and North American members. The Pacific Joint Business was launched shortly thereafter, marking a 15-year partnership between American Airlines and Japan Airlines.

American Airlines, a founding member of the oneworld alliance, operates more than 6,000 daily flights to over 350 destinations in more than 60 countries. The carrier, which traces its roots back to an air mail operation in 1926 and celebrates its centennial in 2026, employs 130,000 aviation professionals and serves over 200 million customers annually.

Alaska Air Group operates hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego, and San Francisco. Together with Hawaiian Airlines and Horizon Air, the combined group flies to more than 140 destinations across North America, Latin America, Asia-Pacific, and Europe. Both Alaska and Hawaiian are members of the oneworld alliance.

AirPro News analysis

We view Alaska Airlines’ entry into these joint businesses as a structural shift in the U.S. airline market. By securing antitrust immunity and metal-neutral revenue sharing, Alaska transitions from a domestic feed provider to a full commercial partner on global routes. This integration effectively fortifies the oneworld alliance’s position in the Pacific Northwest, providing a unified competitive response to rival hub operations at Seattle-Tacoma International Airport and strengthening transpacific flows.

The United States Bankruptcy Court for the Southern District of New York approved first-day relief requests for Air Baltic Corporation AS (airBaltic) on September 16, 2026, unlocking an initial €140 million (USD 161.5 million) in debtor-in-possession financing to sustain operations during its Chapter 11 restructuring.

The Latvian flag carrier voluntarily filed for Chapter 11 bankruptcy protection on September 14, 2026, citing severe liquidity pressures driven by escalating jet fuel prices and prolonged engine supply chain disruptions. According to a company press release, the court approval ensures the airlines can maintain uninterrupted flight operations, pay employee wages, and honor obligations to customers and critical suppliers as it works to restructure USD 583 million in funded debt and lease liabilities.

Securing debtor-in-possession financing

The initial €140 million draw represents the first tranche of a €350 million (USD 404 million) debtor-in-possession (DIP) financing facility. The lending syndicate providing the capital includes Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management. The DIP financing carries an approximate interest rate of 12 percent, structured as the Secured Overnight Financing Rate (SOFR) plus 8 percent.

Access to this capital is critical for airBaltic to meet immediate financial obligations. Court filings list Pratt & Whitney as the airline’s largest unsecured creditor, with a claim amount of USD 66.5 million. Additionally, the carrier faces a USD 42.4 million unsecured claim for European Union Emissions Trading System (ETS) payments, which are due by September 30, 2026.

In a statement following the hearing, airBaltic President and CEO Erno Hildén confirmed the airline’s operational status remains unaffected by the legal proceedings.

“The Court’s decisions are an important first step in our financial reorganisation, allowing us to continue operating while moving forward with the restructuring,” Hildén said. “For our passengers, employees and partners, our focus remains unchanged: we continue flying and serving our customers as normal.”

Latvian Prime Minister Andris Kulbergs also acknowledged the court’s decision, stating the approval means the airline can immediately access financing, begin the restructuring process, and review obligations to creditors.

Fleet downsizing and supply chain pressures

A central component of the airline’s restructuring strategy involves a significant reduction in its operating fleet. airBaltic currently operates 54 Airbus A220-300 aircraft but is targeting a downsized fleet of 36 aircraft by the end of 2026. To achieve this, the carrier is in active discussions with Airbus SE to cancel or defer outstanding deliveries on a USD 3.5 billion order for 40 additional aircraft.

The airline is also negotiating with Pratt & Whitney regarding USD 106.7 million worth of additional engines. Over the past several years, airBaltic has been heavily impacted by Pratt & Whitney PW1500G powder metal inspection mandates and a global shortage of spare engines. These supply chain constraints kept multiple Airbus A220-300 aircraft grounded, severely limiting the airline’s network capacity and revenue generation potential.

The restructuring process is targeted for completion by June 2027.

AirPro News analysis

We note that airBaltic’s Chapter 11 filing highlights the compounding vulnerability of regional operators to global aerospace supply chain bottlenecks. The carrier’s exclusive reliance on the Airbus A220-300 exposed it disproportionately to the PW1500G engine shortages. When combined with macroeconomic shocks, including a reported doubling of jet fuel prices linked to Middle East instability, the airline’s liquidity position became untenable despite a €30 million state loan from the Latvian government in April 2026.

The Latvian government holds 88.37 percent of the airline’s voting rights and signaled prior to the filing that the carrier could not continue under its current business model without fresh capital. The targeted completion date of June 2027 for the court-supervised process suggests a rapid restructuring strategy, but its success will depend heavily on the airline’s ability to successfully renegotiate its multi-billion dollar orderbook with Airbus and resolve its outstanding liabilities with Pratt & Whitney.

Sources: airBaltic Press Release