Lufthansa-ITA Takeover Talks Could Be Wrapped Up By Mid-April

Lufthansa’s takeover bid for ITA Airways continues to gather momentum as the proposed business plan for the Italian state-owned airline is approved by both parties. According to Reuters, this could lead to the deal being closed as early as mid-April.

The German flag carrier is looking to initially purchase a 40% stake in ITA Airways, with the intention of buying the rest of the airline at a later date. The minority share is said to be worth in the region of €200 million ($217 million).

Earlier this week, the CEO of Lufthansa, Carsten Spohr, met with Italian Economy Minister, Giancarlo Giorgetti, and chairman of ITA Airways, Antonino Turicchi, to discuss the ongoing negotiations. At the meeting, a business plan was agreed upon for how ITA Airways should be managed going forward. The Italian Treasury has since hailed the success of the talks, saying,

“During the positive conversation, the shared industrial plan was illustrated that will determine the development of ITA Airways in terms of fleet, network, and strategic objectives. With today’s meeting, further progress is made towards the industrial partnership between the two carriers.”

Will ITA Airways’ losses weaken its value?

Lufthansa currently has exclusivity in its takeover bid, making it beneficial for the German flag to seal the deal before this comes to an end on April 24th and other parties may become involved. Yet, while interest in acquiring ITA Airways remains high, Spohr stated that price will be a key factor in the negotiations, and that the amount paid for the partial stake might need to be reviewed in light of the Italian carrier’s recent financial performance.

This week, ITA announced losses of €486 million, despite taking over €1.58 billion in revenue. The airline cited both the lingering impact of the pandemic and ongoing rises in fuel costs as reasons for the losses. Given its current position, the proposed merger with a stronger rival is seen by many analysts as a wise move by ITA Airways.

Italy’s first operator of the Airbus A330-900

ITA Airways commenced operations in October 2021, in the wake of Alitalia’s demise. Since then, the SkyTeam member has grown to fly a fleet of 68 aircraft, many of which boast its distinctive blue livery. Last year, the airline operated over 97,000 flights and carried 10.1 million passengers.

The carrier is due to become Italy’s first operator of the Airbus A330-900 when it takes delivery of the first of 17 of the type on June 1st. ITA Airways also has two further Airbus A350-900s on order, as well as a total of 51 narrowbody aircraft, including 23 Airbus A320neos and nine Airbus A321neos.

What do you think of the latest development in Lufthansa’s proposed bid for ITA Airways? Do you see the sale finally being agreed before Lufthansa’s exclusivity ends on April 24th? Share your thoughts by commenting below.

Source: Reuters

• 

  ITA Airways

  IATA/ICAO Code:

  AZ/ITY

  Airline Type:

  Full Service Carrier

  Hub(s):

  Rome Fiumicino Airport

  Year Founded:

  2020

  Alliance:

  SkyTeam

  CEO:

  Fabio Lazzerini

  Country:

  Italy

• 

  Lufthansa

  IATA/ICAO Code:

  LH/DLH

  Airline Type:

  Full Service Carrier

  Hub(s):

  Frankfurt Airport, Munich Airport

  Year Founded:

  1953

  Alliance:

  Star Alliance

  Airline Group:

  Lufthansa Group

  CEO:

  Carsten Spohr

  Country:

  Germany