Rome, May 26, (dpa/GNA) – German airline Lufthansa has agreed to take over a minority stake in the Italian airline ITA Airways, both airlines announced at the signing of the contract in Rome on Thursday.
ITA was formed in 2020 after a restructuring of the failed Alitalia, which the government in Rome took over in March of the same year when various takeover bids failed.
After months of negotiations this year with the Italian state, Lufthansa acquired an initial 40% of ITA’s shares.
Earlier media reports said the German airline plans to pay between €320 million and €330 million ($343.36 million-$354.09 million) for the stake.
Both parties have now confirmed the agreement in principle, but have not yet confirmed specific figures.
Once ITA Airways begins to make profit again, the reports said Lufthansa may then invest a further €500 million to acquire 50% to 55% of its shares, which would be a majority stake.
The Italian state would thus remain a shareholder for the time being, in contrast to Lufthansa’s initial plans.
The deal is subject to competition law reviews at both a national and European level.
While Italia Trasporto Aereo (ITA) took over the flight operations of its insolvent predecessor Alitalia in October 2021, it is not its legal successor.
ITA has, however, secured take-off and landing rights as well as the Alitalia brand. The legendary name could possibly soon be reactivated under the new corporate umbrella.
Lufthansa strategy chief Jörg Eberhart, who already headed the regional subsidiary Air Dolomiti operating in northern Italy, is being discussed as the new head of ITA.
Last year ITA made a loss of €486 million ($521 million) on a turnover of just under €1.6 billion. At the end of March, the company cited the aftermath of the coronavirus pandemic, increased fuel costs due to the Ukraine war and the poor euro-dollar exchange rate as the reasons for the figures in the red.
The target for 2027 is now 94 aircraft and a turnover of €4.1 billion.
Lufthansa chief executive Carsten Spohr spoke of a win-win situation for Italy, ITA and his company. He wants to bring the lean Alitalia successor with its young fleet into the profit zone via higher load factors, cheaper purchasing and better flight coordination.
Lufthansa has wanted to gain a foothold in its second most important foreign market for many years. An attempt launched in 2009 under the name Lufthansa Italia came to an end in 2011.
At present, the Lufthansa Group only attracts transfer passengers from rich northern Italy to the Munich hub with flights operated by Air Dolomiti. Now, with ITA, Lufthansa is acquiring market share in an environment dominated by non-domestic low-cost carriers such as Ryanair and Easyjet.
Deutsche Lufthansa AG has already taken over the former state-owned airlines of neighbouring Switzerland, Austria and Belgium and has continued to operate them as independent brands.
The Belgian Sabena successor Brussels Airlines had been taken over by Lufthansa in two stages, initially also starting with a minority stake.
Another possible takeover target is TAP of Portugal.