2024 07 03 161659
The European Commission announced its conditional approval for Deutsche Lufthansa’s proposed 41 percent stake in Italy’s ITA Airways. The deal, negotiated last year, has Lufthansa paying €325 million for its stake in the carrier, with the Italian finance ministry also contrubuting €250 million as part of a capital increase.
The commission has approved the deal, but only after a series of concessions to assuage anti-competitive fears. Those include the ability for one or two rival airlines to launch non-stop flights linking Rome and Milan with Central Europe, re-allocation of take-off and landing slots at Linate airport in Milan to competitors for short-haul routes, and increasing non-stop flights between Rome and Milan to competitive hub cities to facilitate 1 stop competition.
The deal also includes a path to full ownership of the airline by Lufthansa Group beginning in 2025. Lufthansa Group currently own Swiss, Austrian Airlines, Brussels Airlines, and Eurowings.
Carsten Spohr, CEO of Lufthansa Group, said “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.”
The Bottom Line:
Alitalia and the restructured ITA are well positioned for future growth, but needed a strong financial and operational partner. Lufthansa Group supplies the strength and feeder footprint they need for success to take full advantage of their geographic location and market size within Europe. Italy will now become the third largest market for LH, after Germany and the United States, and an important hub for developing new markets for the group.
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