EU Commission Approves Lufthansa’s Stake in ITA – Full Takeover Possible from 2025

ITA Airways Flugzeug

After much back and forth, the time has come: The European Commission has given the green light for the Lufthansa Group’s entry into ITA Airways. The airline commenced operations in 2021 as the successor to the bankrupt Alitalia and is currently under Italian state ownership.

At times, a stake from Delta with Air France-KLM was also discussed. Now, Lufthansa has won the bid and is initially allowed to acquire a 41% stake in ITA. However, this comes with several concessions.

These primarily include the provision of slots and resources to competing companies. Notably, many slots at Linate must be given to other airlines (likely EasyJet and Volotea). Additionally, competitors will gain access to interlining with ITA, allowing them to offer connecting flights via Linate. There are also obligations to support competitors on long-haul routes to prevent a Lufthansa-ITA monopoly. The EU Commission states that their competition concerns have been fully addressed.

Full ITA Takeover in Sight

Lufthansa and ITA expect the stake acquisition to be completed in the fourth quarter of 2024. However, it is unlikely to remain a partial acquisition. In the medium term, Lufthansa intends to fully acquire ITA from the Italian Ministry of Finance. The current plan looks roughly as follows:

  • From Q4 2024:
    • Introduction of codesharing and connecting flights between Lufthansa Group and ITA
    • Miles&More to be the new frequent flyer program for ITA flights
    • Lufthansa lounge access for ITA passengers and vice versa
  • 2025 or later:
    • A full takeover of ITA by Lufthansa is possible
    • ITA joining the Star Alliance
    • ITA joining the A++ joint venture comprising Lufthansa Group, Air Canada, and United
    • Rome-Fiumicino becoming the sixth hub of Lufthansa Group (alongside Frankfurt, Munich, Vienna, Zurich, and Brussels)

Currently, ITA’s long-haul focus is on America. However, Lufthansa also has high hopes for markets in South America and Africa. Presently, ITA serves only three destinations in each region, but this is expected to increase in the future:

The hub in Rome offers ideal conditions for expanding the joint route network towards Africa and Latin America, thus providing customers with improved connections to the southern hemisphere.

Press release by Lufthansa

Conclusion

It has been a long struggle. Lufthansa had already made an offer to acquire Alitalia in 2018, but numerous other investors were also in the conversation. While the outcome may not satisfy everyone, there is finally certainty about ITA’s future.

Hopefully, ITA will at least retain its dark blue livery and not be repainted in the usual Eurowhite scheme of the Lufthansa Group.

Sources: Press releases from Lufthansa & the European Union

Cover Picture: Foto von Niels Baars auf Unsplash

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