Lufthansa has confirmed that it has acquired a 41% stake in ITA Airways, ending months-long speculation about the German airline group’s interest in acquiring a share in the Italian carrier.
Lufthansa bought the stake for €325 million ($349 million), acquiring the shares of the Italian airline via a capital increase. The deal includes an “option to acquire all remaining shares at a later date,” according to the German airline group. The price for the remaining shares of ITA Airways will depend on its performance, Lufthansa noted.
Furthermore, the Italian Ministry of Economy and Finance (Ministero dell’Economia e delle Finanze, MEF) has pledged a €250 million ($268.5 million) capital increase in ITA Airways as part of the agreement. That takes it to the limit of the capital that it would be able to invest, according to the European Commission’s (EC) decision when the Italian government established ITA Airways.
In total, the EC has allowed the Italian government to invest up to €1.3 billion ($1.39 billion) into ITA Airways.
“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,” said Carsten Spohr, the Chief Executive Officer (CEO) of the Lufthansa Group. “[…] this investment will enable us to continue our growth in one of our most important markets,” Spohr added.
Lufthansa had also signed a Memorandum of Understanding (MoU) with Italian state railroad company Ferrovie dello Stato Italiane back in February 2022. The purpose of the agreement is “to increasingly transport passengers in Italy with rail connections to and from their respective flight connections at various Italian airports”. The German airline group has signed similar agreements with respective rail companies in Austria, Germany, and Switzerland.
“The contractual finalization of the agreement is expected to be completed shortly. The acquisition of the minority stake is subject to approval by the relevant authorities,” Lufthansa noted in its announcement on May 26, 2023. Once the deal is finalized, Lufthansa and ITA Airways are expected to cooperate at a commercial and operational level, with the Italian airline also benefitting from the Lufthansa group synergies.
In addition to the newly acquired stake in ITA Airways, the Germany-based airline group owns Austrian Airlines, Brussels Airlines, Swiss International Air Lines, and their respective subsidiaries, such as Swiss’ Edelweiss Air.
Lufthansa officially announced that it put in a bid to invest in ITA Airways in January 2023, following a months-long saga that included multiple interested parties dropping their interest in the Italian carrier. One of those parties included a consortium of Delta Air Lines, Air France-KLM, and the investment firm Certares, while Lufthansa was previously partnered with the Mediterranean Shipping Company (MSC), who also backed out of the deal.
ITA Airways began flights on October 15, 2021, the same day that the ailing Italian flag carrier Alitalia ceased operations.