The group, which also owns Iberia and Aer Lingus, would need to transform TAP’s business to increase its current 8% margin to match the group’s target range of 12-15%, he said on Bloomberg TV.
“To do that, we would need a real clear path to ownership, full ownership or majority ownership, and at the moment that is not on the table,” Cadbury said.
Last month, IAG submitted its expression of interest in TAP, following Air France-KLM and Deutsche Lufthansa AG, which are also vying for a stake in the Portuguese airline.
Portugal’s government said on Friday that Air France-KLM, Deutsche Lufthansa and IAG had been cleared to submit non-binding offers for TAP.
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The government’s plan to sell less than 50% of TAP has been aimed at reducing potential pushback from the opposition.
IAG needs to work with the Portuguese government to understand how to transform and invest in TAP, Cadbury said.
“If we can’t do that, it’s going to be a very difficult deal to do,” he said.
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