IAG, the owner of British Airways and Iberia, seems to be having cold feet over buying up to a 49% share in TAP Air Portugal.
One of three competitors in the race to acquire a 49% minority share,  Air France-KLM and Lufthansa being the other two, the holding group that owns British Airways and Iberia now thinks that selling a minority share in the airline would curtail its capacity to raise TAP’s margins to the same levels as the group in line with its strategy.
Nicholas Cadbury who heads the group’s financial and sustainability area told the Bloomberg agency admitted that this “difficulty was a problem”.
According to Cadbury, the group that also has the Irish airline Aer Lingus and the Spanish low cost Vueling would have to transform TAP’s business model to increase the current 8% margin to 12% or 15% to be in line with the group’s objectives.
“To achieve this, we would need a very clear path to ownership – full ownership or at least a majority – and, at this time, that is not on the table,” Cadbury told Bloomberg TV. ​The official added that the IAG group will have to work with the Government to understand how to transform TAP. ​”If we can’t do that, it will be a very difficult deal to make,” he said.

The current privatisation phase of the Portuguese company foresees the sale of 49.9%, of which 5% will be preferentially earmarked for the employees.
The Minister of Infrastructure announced on Friday that the Government had decided to mandate Parpública to send invitations to the three consortia that have applied for privatisation: IAG, AirFrance-KLM and Lufthansa, to submit non-binding proposals. ​The letters will be sent by January 2.
The Franco-Dutch group has already responded. ​”Air France-KLM expresses its satisfaction with the Portuguese Government’s announcement that the group is qualified to enter the next phase of TAP’s privatization process,” it said in a statement.