In a move that is expected to reshape the European airline industry, Lufthansa is expected to firm a 40% stake in ITA Airways soon. Final negotiations are set to take place today, Thursday 25 May, between the Italian Ministry of the Economy and the Lufthansa Group.
The deal, which would still be subject to regulatory approval, is expected to close in the second half of 2023.
According to Italian news source Corriere Della Sera, Lufthansa will initially enter with a share of 40% of the Italian carrier, to later rise to at least 90%, though neither airline has entered a formal comment as yet.
ITA Airways was formed in October 2021, after the Italian government took over the assets of Alitalia, the country’s former flag carrier. The new airline has been struggling to make a profit, and it has been losing market share to its competitors.
The acquisition by Lufthansa is seen as a way to turn around ITA Airways and make it a more competitive player in the European airline market.
Under the terms of the agreement, Lufthansa will pay €320-330 million for its stake in ITA Airways. The German airline will also have the option to purchase an additional 50-55% stake in the Italian carrier in 2026, subject to certain conditions being met.
The acquisition of ITA Airways is a strategic move for Lufthansa. The Italian airline has a strong network in Italy and Europe, and it also operates long-haul flights to the United States and South America.
The deal will give Lufthansa a larger presence in Italy, and it will also help the German airline to compete with other major European airlines, such as Air France-KLM and British Airways.
The deal between Lufthansa and ITA Airways has been met with mixed reactions. Some industry experts have praised the move, saying that it will help to create a stronger and more competitive European airline industry.
Others have expressed concerns about the potential for anti-competitive behavior, and they have called for close scrutiny of the deal by regulators.
Only time will tell whether the acquisition of ITA Airways will be a success for Lufthansa. However, the deal is a clear sign that the German airline is determined to expand its reach in Europe and compete with its rivals on a global scale.
What does the deal mean for passengers?
The acquisition of ITA Airways by Lufthansa is likely to have a number of implications for passengers. First, it is likely to lead to increased competition on routes between Italy and other European countries. This could lead to lower fares and more choices for passengers.
Second, the deal could lead to improved service on these routes. Lufthansa has a reputation for providing high-quality service, and it is likely to bring this expertise to ITA Airways.
Third, the deal could lead to more flights between Italy and the United States and South America. ITA Airways currently operates a limited number of long-haul flights, but Lufthansa has a much larger network.
This could lead to more options for passengers who want to fly between Italy and these destinations.
Overall, the acquisition of ITA Airways by Lufthansa is likely to be a positive development for passengers. It is likely to lead to increased competition, improved service, and more flights on routes between Italy and other parts of the world.
What does the deal mean for the European airline industry?
The acquisition of ITA Airways by the Lufthansa Group is a major development for the European airline industry.
It is the first time that a major European airline has acquired a stake in another major European airline since the financial crisis of 2008.
The deal is likely to have a number of implications for the industry. First, it is likely to lead to further consolidation.
Lufthansa is now the largest airline in Europe, and it is likely to use its position to acquire other airlines. This could lead to a smaller number of major airlines in Europe, which could lead to higher fares and less competition.
Second, the deal is likely to lead to increased scrutiny from regulators. The European Commission is likely to investigate the deal to ensure that it does not lead to anti-competitive behavior. This could delay the closing of the deal, and it could also lead to conditions being imposed on the deal.
Third, the deal is likely to lead to changes in the way that airlines operate in Europe. Lufthansa is likely to integrate ITA Airways into its network, and it is also likely to make changes to ITA Airways’ business model.
This could lead to changes in the way that passengers book flights, the way that airlines price their flights, and the way that airlines compete with each other.
Overall, the acquisition of ITA Airways by Lufthansa Group is a major development for the European industry. It is likely to lead to further consolidation, increased scrutiny from regulators, and changes in the way that airlines operate.