TAP Air Portugal and regional rival Portugalia are set to work together for the first time after SAirGroup's deal to take a 42% stake in the latter from majority owner Grupo Espirito Santo.

The Swiss company already has a deal to buy 20% of TAP from the Portuguese Government, although completion of the sale is being held up by negotiations with pilot unions. SAirGroup says the price it expects to pay for the TAP shares may be reduced depending on the outcome of the pilot talks.

It says there are no plans to merge the operations of the two Portuguese carriers. Portugalia will provide regional and feeder services, while TAP will focus on international scheduled routes. "This acquisition should provide a comprehensive and lasting solution for the Portuguese air transport industry while further strengthening the Qualiflyer Group," says SAirGroup.

Portugalia operates 12 aircraft serving 20 destinations and is 80% owned by Espirito, a private banking group.

• The SAirGroup has revealed that it has an option to buy another 10% stake in South African Airways in addition to the 20% it acquired last month.

Source: Flight International