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Tuesday, February 7, 2023

Lufthansa out after Italy selects Delta and Air France-KLM for ITA bid

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Italy has chosen a Certares-led consortium, supported by Air France-KLM and Delta Air Lines, for talks on purchasing a controlling stake in the nation’s airline, ITA Airways. This consortium defeated a competing offer from Germany’s Lufthansa (LHAB) (LHA) and shipping company MSC.

According to the nation’s Ministry of Economy and Finance, the Certares-led consortium offer was “deemed more in keeping with the objectives stated by the Prime Minister’s Decree.”

The offer’s specifics have not yet been made public. Certares, however, is reportedly offering €600 million to purchase a 60% part in ITA, according to a source cited by Reuters, leaving the government with at least a 40% ownership stake and the authority to exercise specific strategic decisions.

Since its inception in the fall of 2021, Italy’s new national airline ITA Airways, which replaced loss-making Alitalia, has been hunting for a new owner to pull it out of its financial woes.

“It would be wrong to remain independent because we would always be too small compared to the three big airline groups operating in Europe,” ITA’s CEO Alfredo Altavilla said in November 2021.

Germany’s Lufthansa (LHAB) (LHA) and MSC company, a competitor of the Certares-led consortium, reportedly proposed between €850 and €900 million for a greater 80% interest in the airline.

Lufthansa (LHAB) (LHA) said that the joint offer with MSC was “the better answer for ITA” in an email statement to AeroTime.

“Apparently, a path is now being chosen that allows for more state influence and does not provide for a complete privatization of ITA,” a spokesperson for Lufthansa (LHAB) (LHA) said.

The Lufthansa Group “remains strongly positioned in Italy,” according to Lufthansa (LHAB) (LHA), even in the absence of collaboration with ITA.

It is important to note that outside of its home markets, Italy is the largest market in Europe for Lufthansa (LHAB) (LHA).

“With our own Italian airline Air Dolomiti and with all our airline brands we already have a strong position in Italy with around 4 million passengers and over 130 daily departures from 21 destinations,” Lufthansa (LHAB) (LHA) said.

On October 15, 2021, ITA began operations, the day after Alitalia’s final flight. According to Planespotters.net, the airline now operates 64 aircraft, including the A319, A320, A330, and A350, with plans to expand its fleet to 105 by 2025.

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