The ITA Airways bid is reportedly getting closer to Lufthansa’s.
As early as the following week, the German flag airline Lufthansa might put in a bid for Italy’s ITA Airways, according to a Reuters story. The announcement coincides with the Italian government’s accelerated privatization ambitions for the airline.
efforts to fully privatize
Since its inauguration in the fall of 2021, Italy’s national carrier ITA Airways, which replaced loss-making Alitalia, has been looking for a new owner to assist it in resolving its financial issues.
A decree allowing bidders to acquire holdings in ITA through various capital increases was passed by the nation’s newly elected administration in order to hasten the airline’s privatization.
Lufthansa is leading the charge to enter the capital of ITA, claims a source cited by Reuters. Through a capital raise costing between €300 million and €350 million, it might acquire a 40% interest in ITA.
The German airline and shipping conglomerate MSC had an arrangement in place before the process even began for the German airline to offer to purchase ITA. But in November 2022, MSC backed out of a partnership that was looking to invest in ITA.
Italy continues to be the largest market outside of Lufthansa’s home markets in Europe, so the airline company is still interested in acquiring a stake in ITA Airways.
Italy is the second-most significant strategic aviation market in the world, according to a March article in Simple Flying by Lufthansa CEO Carsten Spohr. According to a Spohr quote:
“Everyone who has been involved in the topic for a while would know that Italy is the most significant foreign market for us in Europe and that it ranks second globally, behind the US.
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Is Lufthansa still the only option for ITA?
Even though ITA had previously selected another company to start talks for acquiring a controlling stake, Lufthansa now seems to be the only practical alternative for Italy’s national carrier, ITA Airways.
Italy chose the Certares-led consortium in September 2022 for exclusive talks on purchasing a controlling stake in the country’s national airline. This consortium is supported by Air France-KLM and Delta Air Lines.
The offer from the Certares-led consortium was “deemed more in accordance with the Prime Minister’s Decree’s aims,” according to a statement from Italy’s Ministry of Economy and Finance at the time.
Exclusive discussions, however, with the US-based private equity fund Certares came to an end without a conclusion. In a statement dated October 31, 2022, the Ministry of Economy stated:
“As of today, the exclusivity obligations given on August 31 expire.”
The day after Alitalia made its last flight, on October 15, 2021, ITA went online. The airline now flies a total of 73 aircraft, including the Airbus A319, A320, A330, and A350, according to statistics from ch-aviation, with ambitions to expand its fleet to 105 by 2025.
The airline’s CEO and general director also predicted that “passenger revenues in 2022 will exceed the value indicated in the budget.” in December 2022. The information was released at the same time that ITA revealed new routes between Rome Fiumicino International Airport (FCO) and Washington Dulles International Airport (IAD).
