[ad_1]
Lufthansa is to take a 41 per cent stake in Italy’s ITA Airways, the successor company to Alitalia, the now-insolvent flag-carrier.
The German group said it would pay €325mn for the stake and that Italy’s economics ministry would put a further €250mn into the Italian airline.
Lufthansa will integrate ITA with the other carriers in the broader group, including Eurowings, Swiss, Brussels Airlines and Austrian Airlines, as well as the core German flag-carrier. “As a network airline, ITA will closely co-operate with Lufthansa Group to benefit from group synergies,” the airline said.
A joint statement by Lufthansa and Italy’s economics ministry said ITA would hire a further 1,200 employees this year, bringing its total number of staff to 5,500.
The German company will be appointing ITA’s chief executive as well as one of the Italian company’s five board members. Lufthansa holds an option to take a majority stake in the future based on a negotiated price.
The deal concludes a nearly three-year-long search by the Italian government for a private buyer for the Italian flag-carrier.
At the beginning, the process included bidders such as Delta Air Lines, Air France-KLM and the Swiss-Italian container shipping and cruise company MSC.
Thursday’s agreement marks Lufthansa’s second attempt to take over the ailing Italian airline. In early 2022 it submitted a joint offer with MSC for a controlling stake in ITA Airways that was overtaken in late August by a bid from US-based private equity group Certares.
Former prime minister Mario Draghi’s government said at the time the private equity-led offer better suited the Italian airline’s needs. Certares was offering to buy the airline’s controlling stake and it had struck a commercial partnership with Delta Air Lines and Air France-KLM.
The talks were scrapped by Italy’s new rightwing government following October’s general election. According to several Italian officials, the new government wanted the carrier to be taken over by a larger competitor as opposed to a private equity concern.
Establishing a hub in Rome will allow Lufthansa to tap the lucrative transatlantic market and optimise flight schedules on European routes to boost yields.
Stephen Furlong, an airlines analyst at Dublin’s Davy stockbrokers, said Lufthansa’s move was a “helpful development” in the continuing consolidation of Europe’s airline industry.
Lufthansa chief executive Carsten Spohr earlier this month said “geography” was part of the rationale for seeking a stake in ITA.
He said it was “obviously a disadvantage” of the group that its hubs — at Brussels, Frankfurt, Munich, Vienna and Zurich — were all “fairly northern located”.
“I think we are missing a southern hub compared to our European competitors, especially for the growing traffic in and out of Africa and Latin America,” he said.
A hub in Rome would also offer the group more new capacity for flights, he added, pointing out that the group’s main hub at Frankfurt had reached its full capacity.
[ad_2]
Source link