ITA Airways, the struggling national carrier of Italy, has a new owner.
The Italian government and the Lufthansa Group reached an agreement for the German airline giant to buy a 41% interest in the country's state-run carrier, with options to eventually buy the remaining 59%.
The Italian government will invest an additional 250 million euros in cash in the airline as part of the 325 million euros (approximately $348 million) purchase.
The remnants of Alitalia, which the Italian government took control of in March 2020 after years of fruitless efforts to find a buyer, gave rise to ITA Airways. The government decided to nationalize and restructure the airline, which was well-known for losing money, during the COVID-19 pandemic.
Beginning in October 2021, ITA will fly. In 2022, the airline's first full year of operation, it reported a deficit of almost 486 million euros ($527 million), despite revenues of 1.58 billion euros from roughly 10.1 million passengers carried.
To increase its market share in Italy, Lufthansa, which owns several European airlines including Swiss, Eurowings, Austrian Airlines, and Brussels Airlines, made a bid for ITA earlier this year. The German consortium had previously had difficulty establishing a presence in Italy due to competition from low-cost airlines like EasyJet and Ryanair as well as Alitalia (or ITA) and its SkyTeam partners.
In a statement, Lufthansa CEO Carsten Spohr said that as an affiliate of the Lufthansa Group, ITA "can develop into a sustainable and profitable airline, connecting Italy with Europe and the world." In addition, this investment will allow us to maintain our expansion in one of our most significant markets.
Even with the initial small ownership position, Lufthansa will acquire control of ITA's operations under the terms of the agreement, which must be authorized by the European Union.
In its announcement, the German airline group claimed that it and ITA Airways "are expected to immediately start their cooperation at a commercial and operational level" after the transaction closes. To take advantage of group synergies, ITA, a network airline, will collaborate closely with the Lufthansa Group.
Uncertainty still exists around what this means for frequent flyers and point and mile collectors. While ITA, like Alitalia before it, is a member of SkyTeam, Lufthansa is a Star Alliance member. The future of ITA's integration with Lufthansa's Miles & More frequent flyer program and its decision to leave SkyTeam, join Star Alliance, or take another similar action are unclear.
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