Lufthansa Submits Bid For ITA Airways Stake

Lufthansa submitted a bid on Wednesday to acquire an undisclosed minority stake in ITA Airways (rumored to be 40%) and the option to purchase the rest.

According to the Italys’ economy minister, Lufthansa is the only bidder for the stake after other potential partners decided not to go forward, likely scared of losses of more than 10 billion euros since early 2000.

You can access ITA here and Lufthansa here.

ITA Airways is the “new” Alitalia, an airline that went through several reorganizations due to mounting losses.

Lufthansa’s announcement:

Deutsche Lufthansa AG is aiming to acquire a stake in the Italian national carrier ITA Airways (Italia Trasporto Aereo S.p.A.). The plan is to agree on the initial acquisition of a minority stake as well as on options to purchase the remaining shares at a later date. Today, the company submitted an offer to the Italian Ministry of Economy and Finance (Ministero dell’economia e delle finanze) to conclude a Memorandum of Understanding (MoU) in this respect. Contingent on both parties signing this MoU, further negotiations and discussions would be conducted on an exclusive basis.

These talks would primarily focus on the form of a possible equity investment, the commercial and operational integration of ITA into the Lufthansa Airline Group, as well as resulting synergies. In case of a binding agreement is reached, its implementation would be subject to approval by the relevant authorities.

For Lufthansa Group, Italy is the most important market outside of its home markets and the US. Italy’s importance for both business and private travel lies in its strong export-oriented economy and status as one of Europe’s top vacation spots.

Conclusion

It would be bad for the competition in Europe if Lufthansa’s offer would succeed as they already own Swiss, Austrian, and Brussels + Eurowings.

Italy needs someone to professionally run its flag carrier, which is merely an updated version of Alitalia, with a new name and repainted planes.

It is quite remarkable that nobody has been able to shut down this airline that has lost more than 10 billion euros since in the past 15 or so years.