Alitalia successor, ITA Airways is currently a much sought-after aviation company, with Delta, Air France/KLM, and Lufthansa standing on its doorstep, ready to become potential partners. However, according to the Roman daily newspaper, Il Messaggero, Lufthansa appears to be the ITA management’s preferred choice. But the final decision will be made by the owner (100%), the Italian Ministry of Economy & Finance.
According to Italian media, Lufthansa (LH) intends to acquire a stake of up to 40% in ITA Airways. Asked about the potential deal, a LH spokesman remained tight lipped, indicating that his
airline does not traditionally comment on rumors.
In this case, however, it seems to be more than the usual industry gossip, since there are now very concrete indications that a potential ITA-LH tie-up has a very realistic basis. Talks are at an advanced stage, according to insiders in Rome. They point out that negotiations include a broad package consisting of stake holding specifics, technical cooperation in aircraft maintenance and overhaul, a consistent fleet and route policy, as well as the upgrading and mutual use of Rome Fiumicino Airport as a joint gateway. It would be the sixth hub in the European Lufthansa cosmos, following Frankfurt, Munich, Vienna, Brussels, and Zurich.
In addition, Alfredo Altavilla, President of ITA Airways, has repeatedly stated that his airline’s preferred partner would be Lufthansa.
In contrast to this statement, however, ITA has so far liaised with Delta / AF-KL by joining the Sky Team alliance, including the signing of codeshare agreements. Coupled with this is the mutual recognition of Sky’s frequent flyer program, which is incompatible with LH's Miles&More system. These commitments would therefore have to be reversed in the event of a financial entry by LH. Not a very easy task. This might happen soon, because Delta has bowed out of the race for ITA. "We have no intention of investing," Delta CEO Ed Bastian is quoted by Reuters. This is also likely to reduce the chances of SkyTeam heavyweights AF-KL to be selected as preferred bidder by the newcomer's management and its public stakeholders. Leaves LH and BA as most promising potential investors.
From LH's point of view, a stake in Alitalia's successor would be of major interest: The latter is not struggling with legacy problems such as exorbitant unit costs due to a vastly excessive
number of employees, as was the case with Alitalia. In addition, Italy is the second most important passenger market for the Lufthansa Group after the USA and ahead of the Far East.
Expansion is made possible again
The Lufthansa Group includes Swiss Air Lines, Austrian Airlines, Brussels Airlines, Eurowings, Eurowings Discover, and SunExpress (50%).
TAP Portugal might be added as a further member, although this is not currently on the agenda but was discussed intensely prior to the outbreak of the pandemic.
Since Lufthansa received high state subsidies to secure its survival during the pandemic, the management was prohibited from acquiring stakes in other airlines. However, the debt to the state has since been replaced by a capital increase and through bank loans. This automatically eliminates the clause prohibiting the airline from taking a financial stake in other airlines. The way would therefore be clear for buying into Italian newcomer ITA Airways.
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