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Back in July, I wrote about Lufthansa receiving antitrust approval from the European Union (EU) to buy a 41% stake in Italian national carrier, ITA Airways. The $350 million deal was reached after Lufthansa ceded some routes and slots and was expected to close in Q4 2024. It was delayed slightly and now looks like it’s closing. The remaining 59% of ITA Airways will be available for Lufthansa to acquire it in 2025 and onwards.
ITA Airways is the rebirth of former carrier Alitalia. The airline went through a restructuring and transformation in 2021, but it was not enough to make it with government support. Privatization was necessary for this carrier to grow and Lufthansa has been waiting in the wings for some time. The deal will boost Lufthansa’s presence in the Southern Europe market and is needed to boost scale and offset rising operational costs. ITA’s Leonardo da Vinci-Rome Fiumicino Airport (FCO) hub will also provide better access to Africa and Latin America where Lufthansa sees room for growth.
In order to get approval, Lufthansa had to make the following concessions:
- Other airlines have to be provided with “assets” to operate flights between Leonardo da Vinci-Rome Fiumicino Airport (FCO) to/from other airports in Central Europe.
- Lufthansa and the merged entity must help with other airlines’ long-haul routes through interlining agreements and/or slot swaps.
- After the merger, Lufthansa will transfer slots at Milan Linate Airport (LIN) to others for short-haul routes. It’s reported that the airlines will give away 204 slots per week at Milan Linate Airport (LIN) in the summer and 192 in the winter. As a result, ITA Airways and Lufthansa will have fewer slots here than before the acquisition.
The new structure will see the former CEO of Air Dolomiti, Jörg Eberhart, as the CEO of ITA Airways. Sandro Pappalardo will be the President of ITA Airways and the carrier’s existing CEO, Fabio Lazzerini, will be exiting.
Lufthansa Group CEO, Carsten Spohr, shared the following a few months ago around the acquisition:
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.
The acquisition of ITA Airways strengthens the internationalization of the Lufthansa Group. We offer our guests a significantly greater choice of connections and destinations, and with the 5-star hub in Rome we are also extending our premium offering and better connecting strategic future markets south of the equator to our network. Despite the comprehensive and far-reaching concessions, the investment in ITA Airways strengthens the Lufthansa Group’s position in global competition. We will make ITA Airways a strong and successful part of our company and thus secure its future as an international airline and strong brand. ITA Airways will support us in further expanding our position as Number One in Europe.”
With ITA Airways joining the Lufthansa Group, it will also adopt the Miles & More loyalty program that is currently shared with Lufthansa, SWISS, Brussels Airlines, Austrian Airlines, Discover Airlines, Air Dolomiti S.p.A., Edelweiss Air AG, Germanwings GmbH, Lufthansa CityLine, and Tyrolean Airways Tiroler Luftfahrt GmbH. ITA Airways will also be part of the transatlantic joint venture held by Star Alliance partners United, Air Canada, Lufthansa, SWISS, and others.
Anthony’s Take: The airline had a weird integration into SkyTeam and Lufthansa adding it to Miles & More (and Star Alliance) will make it more seamless. Star Alliance lost SAS to SkyTeam in September and ITA Airways is a good trade in my opinion.
(Image Credits: Lufthansa and ITA Airways.)
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