Lufthansa Closes In On ITA Airways Deal Without Partner

Germany’s Lufthansa is nearing an agreement to buy a majority stake in ITA Airways from the Italian government in a process it will pursue on its own.

The move comes after its former partner—shipping group MSC—pulled out of the process and a mooted cooperation with Italian railway operator Ferrovie dello Stato failed to materialize.  

The Italian government privatized ITA Airways at the start of the coronavirus pandemic and is now trying to sell a majority stake in the successor to bankrupt flag-carrier Alitalia, but the process has been a long-drawn-out one, beset with setbacks and slowed down by political upheaval in Italy. 

Two consortia were in the running for ITA Airways, but the Italian government initially selected one made up of Certares, Air France-KLM and Delta Air Lines for exclusive talks for a stake in the carrier. Those talks ended without a deal at the end of October, leaving the door open for Lufthansa, which had been in partnership with shipping group MSC, to re-enter the race. But in November, MSC said it was no longer interested in a stake in the Italian airline.  

Lufthansa was said recently to be considering teaming up with Ferrovie dello Stato, but industry sources said the Italian rail operator would not play a role in an equity investment in the carrier, although a cooperation to feed passengers from rail to air could be envisaged.   

Ferrovie dello Stato had, before the pandemic, come close to leading a rescue plan for Alitalia in which Delta Air Lines was also set to be involved.   

If a deal with Lufthansa moves forward, it could be in two phases, with the German airline group taking an initial stake and eventually taking over the whole of the airline in a second phase. That would mirror Lufthansa’s takeover of Brussels Airlines, which began with a 45% stake, with the German airline taking over 100% in a second phase.  

Italy’s government is said to be keen to bring the long-running process to a conclusion, with hopes for a memorandum of understanding (MOU) to be signed in December, or January at the latest, Italian newspaper La Repubblica reported.  

Lufthansa has repeatedly said it wants to buy into ITA Airways to expand its presence in the lucrative Italian market. 

A Lufthansa spokesperson declined to comment.  

Meanwhile, ITA, which launched operations in October 2021, is moving ahead with expansion, with plans to add 39 new aircraft to its fleet in 2023.   

The fleet changes will mean a 73% capacity increase in terms of available seat kilometers (ASK) across the network, compared to 2022, with long-haul increases growing by 107% the main driver of that growth. By the end of 2023, ITA says it will have 50% of new generation aircraft, out of a total of 96 aircraft in the fleet.