Lufthansa had been interested in purchasing ITA Airways for quite a while and lost out in the first round of the Italian carrier being up for grabs. However, due to political factors in the country, the airline got thrown into the buyer’s arena once more.
The second time, Air France/KLM, the winner of the first round, announced that they wouldn’t bid on ITA again, and the way was cleared for Lufthansa to get on with their original objective to buy the carrier.
It’s really a sad tragedy with the former Alitalia that has risen up from the ashes and been renamed ITA Airways, and since Italy (once again) has a new government, the transactions surrounding the carrier have come under additional scrutiny, leading to the dismissal of management and reevaluation of the companies sale.
Lufthansa is, of course, primarily interested in the lucrative Italian routes, not necessarily in ITA as a carrier, and the plan is most likely to spin it into another low-cost subsidiary as they already have done with many other brands.
Of course, the EU will have to vet and clear this purchase, and should it go through, Lufthansa would have to deal with tough restrictions when it comes to what they can actually do with the airline.
ITA has just reported a net loss of nearly half a billion Euro for the 2022 financial year.
Yesterday, FINANZEN reported that Lufthansa is planning to complete the purchase of 40% in ITA before the end of April.
The negotiations with the Italian state are on the right track, said Lufthansa boss Carsten Spohr, according to a company spokesman on Wednesday in Brussels. He is optimistic that a result will be reached within the agreed deadline of April 24th.
Of course, recent business results played a role in evaluating the company. Lufthansa initially wants to take over 40 percent of the Alitalia successor through a capital increase and then secure the remaining shares through options for a second step. Since January, exclusive negotiations have been going on with the Italian state as the sole owner of the airline.
On Tuesday evening, Ita reported a net loss of 486 million euros for the past year. … Lufthansa wants to gain a foothold in the lucrative market beyond the Alps. The Italians are hoping for more economic security from the Kranich Group and an upgrading of the airports in Rome and Milan, for example, which could become hubs for routes to Africa and South America.
After a contract has been signed, a deal would have to be checked by the national and European competition authorities. According to media reports, the partial takeover could be completed in the summer. …
Lufthansa stock has risen slightly in light of this news though it remains to be seen if ITA will be an easy egg in the easter nest of the German aviation giant. Until recently, Lufthansa also evaluated the purchase of TAP Air Portugal, which the Portuguese government is trying to offload.
So far, LH has made prudent decisions and made something out of each carrier they purchased, unlike for example, Etihad or, back in the day, Swissair. Both of these carriers went on a seemingly courseless buying spree in a manic expansion effort only to use their backside with all of these investments.
We have covered ITA quite a bit ever since its inception, and there was never much sense of urgency to get the airline off the ground to independent operations. The frequent flyer program is, until today, only recognized by ONE SkyTeam partner (Korean Air) despite having gained membership in the alliance quite quickly. It appears like the management only laid low to wait for who will gobble them up.
Conclusion
Lufthansa is short of finalizing the purchase of ITA Airways, which has been a playball between the two competitors AirFranceKLM and Lufthansa for over a year and even before when it was still Alitalia.
Should everything go through, then the Lufthansa Group can add another puzzle piece to their collection, and ITA Tier members would likely be able to match into the Lufthansa Miles&More program with a corresponding status (up to Senator). This is probably the most interesting angle from a consumer perspective, especially for those who have completed the status match to ITA Airways’ relatively useless VOLARE program.
