Final Call: ITA Bidding Ends Tonight

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

When the clock strikes midnight tonight, bidding for ITA Airways is officially closed. The Italian government has been trying to offload a large part of state-owned ITA Airways for quite some time now, and today’s bid closure marks a significant milestone for the process. Let’s take a closer look at all the interested parties and what’s in store for the Italian national carrier in the coming weeks.

What we know so far

The bidding process has been mostly kept away from the public eye, but we know the interested parties. Lufthansa is, by far, the biggest name directly officially involved and interested in buying a slice of the ITA Airways pie. The German airline has partnered up with the Swiss-Italian shipping corporation, the MSC Group, to bid for a majority stake in ITA Airways.

Meanwhile, we have US-based investor Certares as the only other interested party from the other side of the Atlantic. Certares has reportedly collaborated with SkyTeam members Delta Air Lines and Air France-KLM for this venture. Both parties have already submitted or are expected to submit their binding offers for a majority stake in ITA Airways. Hopefully, by now, each consortium will have had a detailed look at the carrier’s financials.

Photo: Vincenzo Pace | Simple Flying

Indigo dropped out

The contest for a majority stake in ITA Airways may only be left with two parties now, but that wasn’t always the case. For a brief period, there was buzz about interest from another US-based investor, Indigo Partners. Indigo Partners has invested in various other carriers (most of them low-cost) like Wizz Air.

According to AvioNews, Indigo Partners is pretty much out of the running at this point. There were talks of Indigo Partners and Certares joining forces to come up with a much stronger proposal against the one by Lufthansa-MSC Group. However, that effort has failed to gather any momentum due to lack of interest from Indigo Partners.

Which way will ITA sway?

The pursuit of ITA Airways is pretty much a two-horse race from now, but it isn’t going to be easy to call out a winner just yet. Both parties have strong financial backing and seem perfectly capable of handling the national carrier. At first glance, the Certares-Air France-Delta consortium may seem like the better choice considering the decades-old SkyTeam bond.

The Lufthansa-MSC Group consortium is likely to win the bid. Photo: ITA Airways

However, from what little information is available on the matter, it seems the Lufthansa-MSC proposal is the frontrunner at the moment. A glaring indication of this came a few days ago when Italy’s National Anti-Corruption body dismissed a 2017 case against MSC Group’s owners. Also, the European bidders are also supposedly offering significantly more money.

Only time will tell who will end up buying ITA Airways, and chances are, it's going to be a while before we know the results. Even if a bidder is selected soon, negotiations relating to each shareholder's stake, value, and rights are likely to take time.