EU Commission approves Lufthansa’s investment in ITA Airways

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EU Commission approves Lufthansa’s investment in ITA Airways
Photo from ITA Airways.
  • The European Commission approved the Lufthansa Group’s planned acquisition of a 41% stake in ITA Airways
  • The initial investment of 325 million euros, agreed upon in May 2023, will be completed through a capital increase
  • ITA Airways will become the fifth network airline integrated into the Lufthansa Group

The European Commission approved the Lufthansa Group’s planned acquisition of a 41% stake in ITA Airways.

Lufthansa Group, the Italian Ministry of Economy and Finance (MEF), and ITA Airways welcomed the European Commission’s competition law approval.

The initial investment of 325 million euros, agreed upon in May 2023, will be completed through a capital increase. The transaction is anticipated to close in the fourth quarter of 2024 – contingent on implementing negotiated remedies with the EU Commission and gaining approval from outside the EU. Options for acquiring the remaining shares in ITA Airways have been agreed upon and can be exercised from 2025 onwards.

ITA Airways will become the fifth network airline integrated into the Lufthansa Group, maintaining its brand name. As part of Lufthansa’s established multi-hub, multi-airline, and multi-brand system, ITA Airways will benefit from “numerous synergies,” including global sales, the Miles & More loyalty program, and optimized aircraft and fuel purchasing.

This integration aims to bolster ITA Airways’ economic position, making Italy the fifth “home market” according to Lufthansa and its second-largest revenue market after Germany and the USA. As the third-largest economy in Europe by GDP, Italy boasts a robust export-driven economy and stands as one of the world’s top vacation destinations.

The two companies aim for a swift and seamless process and stated that ITA Airways’ nearly 5,000 employees will contribute to the Lufthansa Group’s international and diverse corporate culture. Rome-Fiumicino will become Lufthansa’s sixth and southernmost hub, noted for its five Skytrax stars.

The route networks will link through code sharing, creating over 1,000 new transfer options and enhancing connections to South America, North Africa, and the Middle East. ITA Airways will bolster competition in Italy, which is currently dominated by low-cost airlines.

The Italian flag carrier already focuses on quality and premium Italian service culture will continue. Members of its “Volare” loyalty program will have access to Miles & More from day one post-closing. The respective lounges will be mutually accessible, and ITA Airways aims to join the Star Alliance soon. Harmonizing commercial processes, IT systems, and purchasing processes will expedite “numerous synergy” benefits.

Carsten Spohr, CEO of Lufthansa Group, said, “The acquisition of ITA Airways strengthens the internationalization of the Lufthansa Group. We offer our guests a significantly greater choice of connections and destinations, and with the 5-star hub in Rome we are also extending our premium offering and better connecting strategic future markets south of the equator to our network.”

“Despite the comprehensive and far-reaching concessions, the investment in ITA Airways strengthens the Lufthansa Group’s position in global competition. We will make ITA Airways a strong and successful part of our company and thus secure its future as an international airline and strong brand. ITA Airways will support us in further expanding our position as Number One in Europe,” Spohr added.

The integration of ITA Airways into Lufthansa Group will commence post-closing, enhancing commercial and operational cooperation. Until then, both companies will continue to operate competitively.

Negotiations with the European Commission have led to a concessions package, including transferring slots at Milan-Linate Airport to a short-haul competitor and additional feeder flights from Rome to European hubs.

Founded in November 2020 and operational since October 2021, ITA Airways employs 4,860 people. It has a modern fleet of 96 Airbus aircraft (23 long-haul and 73 short-haul aircraft) and serves 69 destinations. The airline carried nearly 15 million passengers last year.

The Rome hub offers strategic expansion opportunities towards Africa and Latin America, improving connections to the southern hemisphere.

READ: MSC, Lufthansa jointly bid for Italian airline