(March 7): Portugal’s plan to sell a stake in flagship airline TAP SA is likely to be delayed for several months as a political crisis barrels towards snap elections, according to people familiar with the matter.

Prime Minister Luis Montenegro’s minority government on Thursday called for a confidence vote — a contest it’s likely to lose after opposition parties vowed to reject the motion. 

Defeat in the parliamentary vote would lead to Montenegro’s dismissal and early elections expected in May. This would put his government in a caretaker role, deciding only on urgent matters that don’t include the sale of TAP, said the people, who asked not to be named discussing contingencies. The sale process would then be delayed for several months until a new government is in place, they said.

Montenegro’s administration was due to start a privatisation process in March that could result in the sale of at least 49% of TAP, Bloomberg News reported last month. The plan to sell less than half the company was aimed at sidestepping political opposition. 

The government had targeted a conclusion of the sale by the end of this year or in 2026, a person familiar with the plan said then.

A spokeswoman at the Finance Ministry, which oversees the privatisation of TAP, declined to comment on the sale. A representative of TAP wasn’t immediately available to comment. 

TAP is Europe’s biggest provider of air links to Brazil, making it an attractive acquisition even though it’s been a drain on public finances since it lacks scale for consistent profits. The Portuguese airline is led by chief executive officer Luis Rodrigues and carried 16 million passengers last year.

The region’s three major network carriers, Air France-KLM, Deutsche Lufthansa AG and British Airways owner IAG SA, have all publicly expressed interest in TAP.   

The confidence vote is expected to take place on March 11, leading to early elections in May if the government loses, Portuguese President Marcelo Rebelo de Sousa said this week. 

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