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Italy’s airlines have struggled for many years. Alitalia ceased operations and morphed into ITA Airways in October 2021. Since then, several discussions have ensued around purchasing the airline with a lot of the conversations centering around Deutsche Lufthansa AG (commonly known as Lufthansa) acquiring ITA Airways. Now, it looks like that discussion is becoming a reality with Lufthansa acquiring a 41% stake.
Lufthansa is the flag carrier of Germany, but it also owns several other passenger airlines including: Austrian Airlines, Brussels Airlines, Eurowings, Air Dolomiti, Swiss International Airlines (SWISS), and several other smaller offshoots of these brands (like Lufthansa CityLine or Edelweiss Air). All of these airlines are part of Star Alliance (with nuance around some of them). ITA Airways and Alitalia before it is part of SkyTeam. With this purchase, it looks like ITA Airways will depart that alliance and become a part of Star Alliance.
The Italian Ministry of Economy and Finance and Lufthansa Group reached an agreement for Lufthansa to acquire a 41% minority stake in ITA Airways. This will be financed with a €325 million capital increase (plus an agreement to invest an additional €250 million in ITA Airways. This also includes the right to acquire the rest of the airline at a later date based on how the carrier is performing. (Photo Credit: Skytrax.)
Lufthansa CEO, Carsten Spohr, commented:
Today’s agreement will lead to a win-win situation for Italy, ITA Airways and Lufthansa Group. And it is good news for Italian consumers and for Europe, because a stronger ITA will invigorate competition in the Italian market. As a young company with a modern fleet, and with its efficient and expanding hub in Rome, ITA is a perfect fit for Lufthansa Group. In Milan, ITA serves a strong catchment area which also offers potential for growth. As part of the Lufthansa Group family, ITA can develop into a sustainable and profitable airline, connecting Italy with Europe and the world. At the same time, this investment will enable us to continue our growth in one of our most important markets.”
This is definitely a loss for SkyTeam and particularly Air France-KLM who partnered closely with Alitalia and with ITA Airways now. The alliance will shrink further and Star Alliance will further cement its place as the largest player in Europe. Hopefully, with this acquisition we’ll see a seamless transition to earning and crediting miles. This is currently an issue with crediting ITA Airways to Delta Air Lines, for example.
Anthony’s Take: I think this is a good move from the perspective of a passenger and a questionable move on the part of Lufthansa. Italy is Lufthansa’s largest foreign market outside the group’s hub countries (Austria, Belgium, Germany, and Switzerland) and the United States. This deal will give them a huge boost there, but time will tell to see if they can manage where others have failed in making this profitable.
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1 comment
Well I guess Skyteam will need to buy TAP and get that away from Star Alliance.