Fuel prices won't derail TAP's privatization, says chairman

By Luciana Magalhaes and Gabriel Araujo

RIO DE JANEIRO, June 7 (Reuters) - Rising fuel costs in aviation will not derail the privatization of Portugal's flag carrier TAP, which could select a strategic partner by year-end, the airline's chairman Carlos Oliveira told Reuters on the sidelines of the IATA Annual General Meeting in Rio de Janeiro on Sunday.

"We are in a very clear, transparent, and well-defined process that was established by the shareholder, which is the Portuguese State," Oliveira said.

The airline is awaiting binding proposals to be submitted by the end of July, Oliveira said, adding that the fuel "situation will have no impact, since it applies to the entire industry."

Air France-KLM and Germany’s Lufthansa were the only airlines to submit non-binding bids for a minority stake in TAP, after British Airways owner IAG opted out despite initially showing interest.

Portugal is seeking to sell up to 49.9% of the carrier, with a 5% stake reserved for employees.

Oliveira said that while the final decision rests with the Portuguese state, TAP’s board is involved in reviewing each bidder’s strategic plan.

TAP is looking for a partner that can provide access to broader, more structured networks, fleet synergies, and maintenance and engineering collaboration, amid a wave of consolidation sweeping European aviation.

"Above all, what we want is to ensure that TAP is a sustainable platform for the future and that it has a solid partner that helps amplify that growth," Oliveira said. 

TAP is also doubling down on Brazil, where it expects to serve 15 destinations by year-end, 10 of them exclusively, Oliveira said.

The airline will soon launch two new routes from Portugal to Brazil: one to Curitiba, starting in July, and another to Sao Luis, from October.

(Reporting by Luciana Magalhaes and Gabriel Araujo in Rio de Janeiro, editing by Manuela Andreoni)