Lufthansa can contact the state Italian Board Ita Airlines. After a long review, the EU Commission gave the green light. To do this, a traditional company must meet a number of conditions. Competition regulators in Brussels require, among other things, that the partners hand over take-off and landing rights at Milan-Linata and provide start-up assistance to new competitors on medium and long-haul routes. There should also be negotiations with competitors.
Negotiations between Lufthansa and Ita lasted more than a year
In the first step, the MDax group will initially acquire 41 percent of the shares of the former Alitalia. Full control could happen within the next few years. At lunchtime, the two CEOs, Karsten Spohr and Antonino Turici, want to talk about the decision together with the press in Rome. Italian Finance Minister Giancarlo Giorgetti is also participating.
Negotiations and examinations to enter the highest selling aviation group Europe The previous Italian competition was delayed for more than a year. Italia Trasporto Aereo (ITA) emerged in 2020 from the state-owned airline Alitalia, which has repeatedly faced severe turbulence. Currently, the company has around 4,500 employees. In comparison, the Lufthansa Group currently has almost 99,000 employees and has already integrated three former state-owned airlines: Swiss, Austrian and Brussels Airways. Brands as well as centers in the home countries of Switzerland, Austria and Belgium has been preserved. Ita is not an official successor to Alitalia, but has secured the rights to the legendary name, which company officials say could soon be revived.
Access to the Italian market
Lufthansa chief Carsten Spohr recently expressed optimism that he would soon receive approval from Brussels. With the acquisition, Lufthansa gets access to the Italian market, which is very profitable, especially due to its close ties with the United States. The fact that Ita is yet another airline breaking up the Air France-dominated Sky Team alliance is a welcome by-product.
Ita cannot survive alone
According to many experts, Ita could not have survived alone. In the domestic market, it has been relegated to the second row by low-cost airlines such as Ryanair and Easyjet. It is finding it difficult to compete with the strength of much larger US carriers on lucrative transatlantic routes. This is much easier with a strong association like Lufthansa, and the EU Commission has also accepted
It was at this point that EU competition authorities raised concerns as Lufthansa was also entering into joint venture arrangements with United and Air Canada in the North Atlantic. All other US carriers, as well as Lufthansa’s European rivals IAG, including British Airways and Air France-KLM, are also active in the world’s most lucrative air transport market. The commission found in March that competitive pressure from other airlines on routes between Italy and the US and Nah Canada and Japan is insignificant.
EU officials also feared that Lufthansa could concentrate too much market power on short-haul routes between Italy and Central European countries. Although there is competition, mainly from the likes of Ryanair, such low-cost airlines often depart from remote airports. Lufthansa has also been active in northern Italy for years with its own regional airline Air Dolomiti.
They fear an increase in ticket prices
First of all, the EU Commission was afraid of negative aspects for consumers. Because if there is little competition on routes and a lot of market power is concentrated in one supplier, the supplier can theoretically charge prices above the normal market level. Customers may then not be able to switch to cheaper competitors, or may only do so to a limited extent. This is also the reason why strict competition rules apply in the EU.
Italy’s right-wing government under Prime Minister Giorgia Meloni suggested that other rivals wanted to slow the takeover of Brussels. Open accusations also came from Rome France and Air France.
Savings in fleet and staff have already been overcome
Like Swiss, which was taken over in 2007, Ita is a restructured company that has undergone painful fleet and staff cuts. With joint procurement and better planning, Lufthansa experts believe they can quickly turn an operating profit. And for 2027, the joint business plan of last year of Lufthansa and the Ministry of Finance of Rome envisaged sales of 4.1 billion euros (2022: 1.6 billion).
Italian government risk factor
€325 million is to be injected into the airline’s equity capital, with 71 jets painted dark blue, as the first installment of a 41 percent stake. The Italian state, certainly a risk factor given the rapid change of power, remains on board for now. From 2025, Lufthansa can exercise the option of an additional 49 percent under clearly defined conditions and can even become the sole owner of the airline. In order to take the remaining 10 percent from the state, we still need to evaluate the business development.
Lufthansa’s head of strategy, Jörg Eberhart, who for almost eight years ran Air Dolomiti, a regional subsidiary active in northern Italy, is being discussed as the new boss of Ita. He may join another Lufthansa employee on the five-member Ita board of directors.
