The German aviation giant announced they will purchase a 41% interest in ITA Airways for 325 million Euros, with an option to purchase the remaining shares at a future date.
Capital Contribution Makes ITA Fifth Airline in Lufthansa Group Umbrella
ITA Airways launched their first flights after the collapse of former Italian flag carrier Alitalia in 2021. The new state-owned airline cut their fleet in half, and trimmed the workforce by over 70% with the goal of becoming profitable.
Under the new agreement with Lufthansa Group, ITA Airways will become the fifth network carrier of the German company. Along with the 325 million Euro ($348 million USD), ITA will also receive a capital increase of 250 million Euro ($268 million USD). The agreement compliments an intermodal memorandum of understanding signed in February 2023 with Italian state railroad company Ferrovie dello Stato Italiane S.p.A., which will strengthen flyer interconnectivity between the airport and rail lines. While the contractual agreement is being worked out, the deal is subject to approval by both countries’ regulatory bodies.
Lufthansa says the ITA will continue to operate as a “standalone airline with its own management and a strong brand identity,” similar to other carriers under the company’s umbrella. The German company also notes that “ITA can benefit from synergies of the Group, such as access to the partner network, central revenue management and the use of Lufthansa Group’s global sales and marketing channels.” It is unclear if this means ITA will leave the SkyTeam alliance for Star Alliance or adopt Lufthansa’s Miles & More loyalty program.
“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,” Carsten Spohr, chief executive of Deutsche Lufthansa AG, said in a press release. “As part of the Lufthansa Group family, ITA can develop into a sustainable and profitable airline, connecting Italy with Europe and the world.”
If the deal is ultimately successful, Lufthansa will have the option to acquire the airline outright. A final purchase price would be based on the business development of ITA Airways.
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Source: frugal travel guy