Key takeaways

  • Moody's says TAP privatization could take "several years" to complete
  • Regulatory approval after a winning bid is chosen seen as "complex"
  • Long timeline could prolong uncertainty over Portugal's flag carrier
  • Process affects connectivity, jobs and government finances tied to TAP

Credit rating agency Moody’s has warned that the sale of TAP Air Portugal, the country’s flag carrier, could take “several years” to conclude even after the government selects a winning bidder. The agency points to a “complex” regulatory approval process that any buyer will face once chosen.

Why Moody’s expects a long regulatory road for TAP

According to Moody’s, the reprivatization of TAP does not end once Lisbon picks a preferred investor. Instead, the deal must then clear a series of approvals from regulators, likely including competition authorities and aviation oversight bodies, both in Portugal and potentially at the European level given TAP’s cross-border operations and alliances.

These reviews typically examine issues like market competition, state aid rules, and the airline’s debt structure, all of which can slow down a transaction of this size. Moody’s assessment suggests that even a swift selection process for a buyer would not translate into a quick handover of control.

Why TAP’s ownership saga matters for residents

TAP has been a recurring subject of political debate in Portugal for years, following a state bailout during the pandemic and repeated discussions about returning it to private hands. The airline remains the country’s principal long-haul carrier, with an extensive network linking Portugal to Brazil, Africa, and North America.

For foreign residents, digital nomads, and second-home owners who rely on TAP for international travel or visits from family abroad, prolonged uncertainty over ownership could mean continued volatility in route planning, pricing, or service levels. A drawn-out sale process may also keep TAP’s finances and strategic direction in limbo for longer than expected.

Moody’s comments serve as a signal to investors and observers that, regardless of political timelines set by the government, the practical steps to complete a privatization of this scale are likely to extend well beyond the announcement of a winning bid.