Lufthansa Completes ITA Airways Acquisition
Ah, Italy! A land steeped in history, culture, and, lately, a not-so-great reputation for its once-proud national airline. For years, the effort to privatize what was Alitalia, and then its successor, ITA Airways, has been as real as the Italian espresso you sip while pondering its fate.
2021 saw the birth of ITA Airways, and wouldn’t you know it, the Italian government rolled up its sleeves, ready to privatize this phoenix rising from the ashes of Alitalia. Fast forward to 2023, and we saw Lufthansa Group—a titan of European aviation—step into the spotlight, keen on snapping up a hefty portion of ITA Airways. The wheels were set in motion: negotiations had to happen, approvals had to be navigated, and an endless bureaucratic dance ensued.
And here we are, folks! Mark the date, as it’s a monumental day for the aviation world in Europe. Lufthansa has officially concluded its investment in ITA Airways, firmly placing this airline into its ever-expanding family. ITA Airways is now officially part of the Lufthansa Group!
Lufthansa Group Finalizes Investment in ITA Airways
So, what’s the nitty-gritty? Lufthansa has acquired a solid 41% stake in ITA Airways to the tune of €325 million. This was all made official at a shareholders’ meeting today. But wait, there’s more: Lufthansa has an option to acquire the remaining shares of ITA Airways down the line, with projections that the whole deal could run upwards of €800 million. Buckle up!
With this new ownership in place, we have a new captain at the helm. Welcome Jörg Eberhart, former CEO of Air Dolomiti—Lufthansa’s long-standing Italian subsidiary—as the new CEO of ITA Airways. And let’s not forget Sandro Pappalardo, who’s stepping in as President while the current CEO, Fabio Lazzerini, takes his leave. Change is in the air, folks!
But how does one secure a deal like this, you ask? Well, it came down to a little give-and-take with regulatory bodies. Notably, Lufthansa and ITA Airways had to relinquish some precious slots at Milan Linate Airport to keep competition healthy. EasyJet, no slouch in the competition game, is already eyeing the expansion with plans for new bases at the airport, and even wet leasing aircraft from ITA Airways.
And lest we forget, the duo has committed to upping the competition bar from Rome’s Fiumicino Airport, particularly towards North America, complementing the existing hubs of Star Alliance carriers.
Here’s how Carsten Spohr, the CEO of Lufthansa Group, laid it all out just before the deal got the green light:
“The approval from Brussels is excellent news for ITA Airways and Lufthansa and especially for all passengers flying to and from Italy. We look forward to welcoming ITA Airways and its outstanding employees as a new member of our airline family very soon. The decision is also a clear signal for strong air traffic in Europe, which can successfully assert itself in global competition.”
ITA Airways Becoming a Lufthansa Group Airline
So, what happens now that this investment has inked its final signature? Well, get ready for some thrilling changes, as ITA Airways is slated to join forces with Lufthansa Group on both commercial and operational levels to leverage those sweet, sweet group synergies.
The endgame? ITA Airways is gearing up to be the fifth network carrier in Lufthansa Group’s multi-brand, multi-hub system, joining the ranks of Lufthansa, SWISS, Austrian, and Brussels. And yes, brace yourselves—Miles & More will replace ITA Volare as the frequent flyer program of choice, with a Star Alliance membership in the cards, although the exact timeline is still shrouded in mystery.
In fact, Lufthansa managed to snag a deal that allows ITA Airways to join the Star Alliance transatlantic joint venture, meaning they’ll be coordinating routes, schedules, and fares with some heavy hitters like Air Canada, United, and SWISS. Italy must be in Lufthansa’s sights—it’s an essential market outside of their home base and the U.S. You can see why this acquisition is a big deal.
My Take on Lufthansa’s ITA Airways Investment
Now, let’s dive into the juicy bits. First off, can we just agree that Italy holds immense importance for Lufthansa? Investing in ITA Airways is a strategic move for rapidly increasing market share in this sought-after locale. Historically, Lufthansa’s biggest hurdle in Italy has been the stronghold of SkyTeam, particularly with Alitalia at the helm, and later ITA teaming up with Air France-KLM. That sort of alliance made it tough for Lufthansa to secure a foothold, particularly in long-haul services.
This investment seems to be more about poaching turf than anything else. However, wrapping this all up is easier said than done. Alitalia has had a notorious track record of financial issues, so the odds are against a smooth sailing for ITA Airways, too. But hold on! There’s a twist: while ITA Airways lost €486 million in its debut year, it turned the tide to a profit of €70 million in its second year. Talk about a turn of events!
Now, a few thoughts and questions bubble to the surface:
- What about Air Dolomiti? It’s another Italian airline already under Lufthansa’s wing; will they merge or stay distinct?
- Even with a minority stake, will Lufthansa take the reins of daily operations? Co-managing with the Italian government could be a slippery slope.
- Italy is a coveted tourist spot, but let’s face it—it’s not the easiest market for a global carrier, with intense competition from budget airlines.
- Exciting times ahead with ITA likely joining Star Alliance, which usually bodes well for award options—let’s hope!
- Labor relations at ITA? Spohr might need to bring a suitcase full of patience!
Bottom Line
So, here we are. Lufthansa Group has officially landed the plane on its investment in ITA Airways, holding a 41% share in Italy’s national carrier. The plan is clear: slowly but surely, they’ll up their stake until they’re fully in control.
What does this mean moving forward? ITA Airways is on the brink of becoming a full-fledged Lufthansa Group airline, joining Star Alliance, and adopting Miles & More for their frequent flyer program, which all sounds promising.
What do you make of Lufthansa now owning a stake in ITA Airways? Only time will tell if this investment soars or crashes, but for aviation fans and travelers alike, the drama is thick and the stakes are high. Who knows? Maybe after hitting the slopes at the Val Seny ski resort, we’ll be hearing about new routes to fantastic destinations in Italy and beyond!