Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links below. This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
Lufthansa received 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 is intended to close in Q4 2024. 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.
Carsten Spohr, Chief Executive Officer at Deutsche Lufthansa AG, said:
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.”
ITA Airways will become the fifth network airline in the Lufthansa Group while keeping its name ITA. The Italian airline will utilize numerous synergies including worldwide sales, the loyalty program (Miles & More), and benefits from aircraft and fuel purchasing. Lufthansa Group managed successfully negotiated for ITA Airways to join the Star Alliance transatlantic joint venture with Air Canada, Lufthansa, SWISS, United, and others. Italy is the third most important country for Lufthansa after Germany and the United States. This is a big win. The other main airlines in the Lufthansa Group include Lufthansa, SWISS, Austrian Airlines, Brussels Airlines, and Eurowings. Lufthansa also owns several others including Discover Airlines, Air Dolomiti S.p.A., Edelweiss Air AG, Germanwings GmbH, Lufthansa CityLine, and Tyrolean Airways Tiroler Luftfahrt GmbH, which are mostly subsidiaries of the carriers above.
Leonardo da Vinci-Rome Fiumicino Airport (FCO) will become Lufthansa’s sixth and southernmost hub. The 5,000 employees of ITA Airways will be quickly integrated into the Lufthansa Group.
Anthony’s Take: I’m flying ITA Airways next week and will report back on the intra-Europe experience. The airline has had a weird integration into SkyTeam and Lufthansa adding it to Miles & More (and presumably Star Alliance) will make it more seamless. Star Alliance is losing SAS to SkyTeam in September and ITA Airways is a good trade in my opinion.
(Image Credits: Lufthansa and ITA Airways.)
User Generated Content Disclosure: The Bulkhead Seat encourages constructive discussions, comments, and questions. Responses are not provided by or commissioned by any bank advertisers. These responses have not been reviewed, approved, or endorsed by the bank advertiser. It is not the responsibility of the bank advertiser to respond to comments.
Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
