Lufthansa Could Buy Up To 40% Of ITA Airways

The Lufthansa Group is reported to be working on a proposal to purchase up to 40% of new Italian airline ITA. The German group is keen to gain a foothold in the Italian market, and wants to develop Rome Fiumicino as a major international hub. ITA’s board has also expressed interest in partnering with Lufthansa; a deal could be reached as early as this summer.

ITA Airways new livery
Lufthansa is keen to take a significant stake in Italy’s newest airline. Photo: Getty Images

Lufthansa wants 40% of ITA

ITA Airways might only have started operations on October 15th, but it has already been making waves in the European aviation space. From ordering up 28 new technology aircraft from Airbus to signing various codeshares, the airline has been keenly making its presence known. But what it really needs is a major partner for future operations, and front runner to be that partner is German aviation giant Lufthansa.

As reported today in Affar Italiani, Lufthansa could be close to a deal with ITA. The group is reported to have presented a proposal for a partnership with the Italian airline, which includes a purchase of share capital of between 15 and 40%. The proposal, which remains unofficial for now, is also reported to include the development of Fiumicino as a new hub and other partnership elements.

Lufthansa is keenly eyeing ITA’s commitment to a leaner, greener fleet, and believes that it can deal a blow to European competition as the industry prepares for significant recovery. Having repaid its bailout loan in full at the end of last year, the Lufthansa Group is in a strong position to begin making strategic investments for the future.

ITA Airways new livery
The airline is keen to secure a major partner for future growth. Photo: ITA Airways

For ITA, a strong international partner is needed to strengthen its network, and Lufthansa is keenly desired by the board. ITA Airways board member Alfredo Altavilla was quoted in December by as saying,

“It would be wrong to remain independent because we would always be too small compared to the three big airline groups operating in Europe. We are a pretty bachelorette who has many admirers… we hope that Lufthansa will be one of those handsome and rich admirers who might be interested in ITA Airways”.

Should the deal with ITA come off for Lufthansa, it would be something of a blow for Delta. The US major has already begun codesharing with ITA, and was hopeful for a strengthened position in Italy thanks to ITA’s SkyTeam membership.

Lufthansa’s Italian hopes

The Lufthansa Group has been keen to get a foothold in the Italian market for some time. Indeed, when the crunch for Alitalia was approaching, the group was hoped to provide some respite for the beleaguered carrier, swooping in as an 11th-hour savior with a bid for the airline.

ITA, Alitalia, SkyTeam
Lufthansa had previously been interested in Alitalia. Photo: Vincenzo Pace – Simple Flying

Sadly, this was not to be, and in January 2020 the group was confirmed to have pulled out of the running for the takeover of the airline. Alitalia took its last flights in mid-October, handing the reins of Italian flag carrier over to its successor ITA. But Lufthansa’s interest in the Italian airline never really went away, as talks with Altavilla have been ongoing.

Italian publications report that a decision will need to be made before the summer season as to ITA’s future direction. Should it choose to stick with SkyTeam, it could enter into the deeper joint venture partnership already held between Delta, Air France-KLM and Virgin Atlantic. Should it take the plunge with Lufthansa, it would mean the end of its SkyTeam membership and a transfer to the Lufthansa-led Star Alliance.