International Airlines Group, the corporate identity of merged carriers BA and Iberia, may be lining up a bid to purchase TAP Portugal, according to a report in The Sunday Times.
The newspaper cites industry sources saying that informal talks have been held. The Portuguese government has been forced to privatise a number of national companies including energy firms and TAP Portugal, as part of the country's bailout by the EU and IMF.
Brazilian airline TAM is also thought to be interested in purchasing the Portuguese flag carrier.
Back in January when BA and Iberia formerly merged, IAG's CEO Willie Walsh said that the two carriers "won't be the last within the group".
"Our goal is for more airlines- but, importantly, the right airlines – to join the group," said Walsh. "Today is the first step towards creating a multinational multi-brand airline group”.