Friday, January 27, 2023
Home Travel Lufthansa Bids to Buy Stake in Alitalia’s Successor, Betting on Air Travel...

Lufthansa Bids to Buy Stake in Alitalia’s Successor, Betting on Air Travel Recovery

Germany’s Deutsche

Lufthansa AG

HAIRS 5.24%

said it had submitted a bid to buy a stake in ITA Airways, the Italian carrier formerly known as Alitalia, in a bet on the continued recovery in air travel.

Lufthansa said Wednesday it was seeking exclusive talks with the Italian government to initially acquire a minority stake in ITA Airways, with an option to buy the remaining shares at a later date. The move comes after a consortium including

Air France-KLM Group

AFLYY 2.03%


Delta Air Lines Inc.

DAL 0.24%

failed to reach a deal to buy a stake in ITA after entering talks last year.

Lufthansa said it wanted to expand in Italy, which it said was its “most important market outside of its home markets and the U.S.,” because of its importance as one of Europe’s biggest economies and most popular vacation destinations.

The move comes amid a recovery in international air travel in the wake of the pandemic, with airlines adding routes and expanding capacity to meet rising demand. ITA has ramped up direct flights to Asia, North America and South America, adding routes from its hub in Rome Fiumicino to New Delhi, the Maldives, San Francisco and Rio de Janeiro.

ITA Airways started operations in late 2021 after the collapse of Alitalia, which had been embroiled in special bankruptcy proceedings for years even before the spread of Covid-19. The new airline relaunched with less than half of Alitalia’s aircraft fleet, reducing its network to focus on profitable routes, with the Italian government searching for a new partner or buyer to reduce the state’s control of the carrier.

ITA Airways started operations after the collapse of Alitalia, which had been embroiled in special bankruptcy proceedings.


Jae C. Hong/Associated Press

Alitalia in its heyday built a reputation for flying Hollywood movie stars and became the official airline of the pope. However, it also struggled to make money—a prospect that has become tougher with rapid expansion in Italy by European low-cost carriers, including

Ryanair Holdings

PLC and

Wizz Air Holdings

PLC, which are undercutting ITA on pricing and costs.

For Lufthansa to secure a deal for ITA, it will need to win the support of the Italian Ministry of Economy and Finance in talks on how ITA can be integrated into Lufthansa’s operations and network.

“Acquiring ITA is one of the most challenging propositions in European aviation,”

Alex Irving,

an equity analyst at Bernstein, said in a note to clients. “The airline has been persistently loss-making, and airlines have invested minority stakes before that have lost their value.”

A consortium of Air France-KLM, Delta and investment firm Certares Management LLC had secured the right to enter exclusive talks with the Italian government in August last year over plans to privatize ITA Airways. However, those negotiations didn’t bear fruit and the period of exclusivity expired at the end of October.

Air France-KLM said Wednesday that it had intended to be part of the talks purely as a potential commercial partner, and not as a majority shareholder. The Italian government wants to ultimately fully privatize the airline.

Air France-KLM will continue to follow ITA’s privatization, it said, adding that it remains interested in partnering with the Italian carrier. ITA remains part of the SkyTeam alliance, which includes Air France and Delta Air Lines.

Lufthansa is a founding member of the rival Star Alliance.

Write to Mauro Orru at and Benjamin Katz at

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link


China looks past Covid as tourist bookings surge for the Lunar New Year

BEIJING — People in China are moving past the pandemic and going out to travel, preliminary data for the Lunar New Year holiday...

Visa Q1 Led by Travel Surge, New Payment Volume

Visa reported fiscal first quarter results that showed continued strides in new payment flows, including...

Making travel plans? Southwest’s holiday meltdown may be a sign of more air travel drama to come

(Illustration by Jim Cooke / Los Angeles Times; Photos by Howard Lipin, K.C. Alfred / The San Diego Union-Tribune and AP Photo)Thousands...


Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

We will ask coach, senior players why the hunger to win was missing: Hockey India president Dilip Tirkey | Hockey News

BHUBANESWAR: India's title hopes at the Hockey World Cup ended in an anti-climax. For a second consecutive World Cup at home,...

People with lower literacy have greater mental health difficulties, research shows

People with poor literacy battle more mental health problems worldwide, according...

Stellantis, Archer Aviation’s Electric Aircraft Cuts Travel Time by 50 Minutes

Welcome to Thomas Insights — every day, we publish the latest news and analysis to keep our readers up to date on what’s...

Recent Comments