The agreement between Lufthansa and the Italian government paves the way for the acquisition of ITA Airways by the German airline giant. After intense negotiations, this operation now awaits validation from the European Commission to allow Lufthansa to secure a strong position in Italy, a crucial market within the European Union.
A buyout in two stages
After months of negotiations, Lufthansa and the Italian state have finalized the terms of their agreement for the German company to take a stake in ITA Airways, successor to the famous Alitalia. The Italian Economy Ministry confirmed that the necessary documents, including the competition remedies demanded by Brussels, were sent on time to the European Commission. These measures include in particular the transfer of airport slots to other companies to avoid excessive concentration on certain routes.
The agreement, sealed in May 2023, provides for Lufthansa to initially acquire 41% of the capital of ITA Airways for an amount of 325 million euros, with an option to gradually increase to 100% in the medium term. Although demands for discounts emerged in the final stages of negotiations, citing a decline in the value of ITA Airways, Rome firmly maintained the initial price. A senior Italian government official declared: “ Italy is not selling off its company », thus meaning that the State would not give in on its financial demands.
The future of ITA Airways under the wing of Lufthansa
For Lufthansa, this acquisition represents a major access point to the third largest aviation market in the European Union, that of Italyallowing it to strengthen itself in the face of intense competition on European roads. Lufthansa's entry into the capital of ITA Airways is part of a global strategy aimed at extending its influence in Southern Europe, after years of unsuccessful attempts with the former Alitalia. Indeed, two takeover attempts had failed in 2009 and 2019, while the group's most recent offer, made in partnership with the carrier MSC in 2022, had also been postponed.
If the acquisition brings ITA Airways a solid shareholder, it also poses challenges in terms of competition regulation. The European Commission, which gave conditional agreement last July, is carrying out an in-depth investigation to avoid a monopoly on certain Italian routes, in particular short and long-haul flights from Italy. The restrictions imposed on Lufthansa aim to preserve balanced access to airport slots for other companies, thus guaranteeing diversity of offer for travelers.
This agreement marks the start of a new era for ITA Airways, founded in 2021 after the end of Alitalia and supported by an injection of European public funds. By joining the Lufthansa group, ITA hopes to stabilize its finances and improve its image among Italian travelers. The challenge for the European Commission will be to closely monitor this new dynamic to ensure healthy competition that is beneficial for consumers.
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