ITA Airways, the Italian national airline born from the ashes of Alitalia, is now ready to hit cruising speed. The German giant Lufthansa confirmed this Thursday that it has acquired a 41% stake in the company for 325 million euros while the Italian state puts 250 million in the pot.
On the verge of bankruptcy, Alitalia had been placed under the supervision of the public administration in 2017 and its situation had further deteriorated under the effect of the Covid-19 crisis. This was followed by a search process for private partners to participate.
Roma and Lufthansa had opened exclusive negotiations at the end of January on the acquisition by the German group of a minority stake in ITA.
Strategic market for Lufthansa
Air France-KLM had been contacted for this operation for a while. Furthermore, the Italian-Swiss shipping giant MSC, which had submitted a joint bid with Lufthansa in January 2022, threw the towel in November, leaving the German company alone on the track.
Once the transaction is complete, ITA and Lufthansa will be able to cooperate operationally and commercially. ITA “will cooperate closely with the Lufthansa Group in order to benefit from group synergies such as access to the partner network, central revenue management and the use of the Lufthansa Group’s global sales and marketing channels,” it can be read at a press release.
The German company is pleased to now be better positioned in Italy, which “represents the most important market outside the countries of origin of the Group and the United States. Italy is the third largest economy in the EU, with a very export-oriented economy”. This is one of the many reasons why business travel to and from Italy is important. For private travelers, the Mediterranean country is one of the most popular leisure destinations in the world.
A recent fleet but halved compared to Alitalia
Lufthansa speaks of a “win-win” agreement “because a stronger ITA will boost competition on the Italian market,” adds Carsten Spohr, CEO of Deutsche Lufthansa AG.
However, ITA suffered a net loss of €486 million in 2022, due to the prolonged effects of the Covid-19 pandemic and rising kerosene prices. These results are “in line with the start-up phase of the company in a still weak market environment during the first months” of 2022 “due to the persistence of the pandemic,” the group comments.
By 2023, the company expects “continued significant growth in revenue volume” through the expansion of its network and fleet, which should result in a “significant improvement” in operating revenue.
The young company initially serves 64 destinations, including ten intercontinental ones, but seeks to strengthen its position in the long haul. ITA Airways also received its first Airbus A330neo “to serve its long-haul routes and new intercontinental destinations.”
ITA operates a fleet of recent aircraft, including 68 Airbus aircraft, but halved compared to Alitalia. 23 new aircraft are due to be added by the end of 2027, according to its industrial plan developed in conjunction with Lufthansa.
The European justice cancels the aid plan for Italian airlines
The General Court of the European Union considers that the European Commission has not sufficiently justified its decision to authorize Italy to subsidize airlines during the Covid-19 pandemic.
Rome had then granted 130 million euros to three small airlines in the country: Neos, Blue Panorama and Air Dolomiti.
A few days earlier, the same court had annulled the approval by the Commission of an aid plan of 6,000 million euros from Germany to Lufthansa.
Source: BFM TV
