Group eyes full acquisition of Alitalia successor ‘at later date’
The Lufthansa Group has agreed a deal with the Italian government to take a 41% stake in ITA Airways, formed from the remnants of Alitalia in 2020, with a view to a full takeover in future.
Lufthansa announced its agreement on taking a minority stake with the Italian Ministry of Economy and Finance in return for providing €325 million in funds for ITA Airways.
The German-led airline group, which comprises Swiss, Austrian Airlines, Brussels Airlines and Eurowings as well as Lufthansa, will have the option to acquire the Italian carrier’s remaining shares “at a later date”.
The purchase price for the government’s majority stake in the airline “will be based on the business development of ITA Airways”.
Lufthansa Group chief executive Carsten Spohr hailed the deal as “a win-win situation for Italy, ITA Airways and Lufthansa”.
Italy’s ministry of finance will provide €250 million in capital to ITA as part of the agreement. The deal remains subject to regulatory approval by the European Commission and could be subject to legal challenges by rival carriers which have previously contested the pandemic-era state aid provided to Lufthansa in Germany and to ITA in Italy.
In a statement, Lufthansa said “cooperation at a commercial and operational level” should begin immediately upon completion of the transaction.
ITA Airways will become the fifth network carrier in the Lufthansa Group. The airline is currently a member of the rival SkyTeam alliance of carriers led by Air France-KLM and Delta Air Lines.
Spohr argued: “It is good news for Italian consumers and for Europe, because a stronger ITA will invigorate competition in the Italian market. As a young company with a modern fleet, and with its efficient and expanding hub in Rome, ITA is a perfect fit for Lufthansa Group. In Milan, ITA serves a strong catchment area which also offers potential for growth. At the same time, this investment will enable us to continue our growth in one of our most important markets.”
ITA Airways was founded in November 2020 and has a fleet of 66 Airbus aircraft. It carried more than 10 million passengers last year and employs about 4,000. The carrier serves 21 domestic destinations, 33 international and 10 intercontinental routes from its hubs in Rome and Milan.
Lufthansa said it intends to extend the ‘intermodal transport’ initiative the group is developing for feeder traffic, having signed a Memorandum of Understanding with the Italian state railway company Ferrovie dello Stato Italiane in February.
This aims to link flights with rail connections to and from airports in Italy, Germany, Austria and Switzerland.