Lufthansa invests €325 million in ITA Airways

The Lufthansa Group yesterday confirmed that it had acquired a 41% stake in the Italian airline ITA Airways, with the Italian Ministry of Finance expected to invest €250 million in its national carrier.

The German group confirmed on 25 May 2023 that it had reached an agreement with the Italian Ministry of Economy and Finance (MEF) to "acquire a minority stake in the Italian national airline ITA Airways (Italia Trasporto Aereo S.p.A.)". Lufthansa will acquire a 41% stake in ITA for €325 million via a capital increase. "The capital injection is therefore of direct benefit to the company", says a group press release. As part of the agreement, MEF has also committed to a capital increase of 250 million euros in ITA. In addition, MEF and Lufthansa "have agreed on options to allow a potential acquisition of the remaining shares by Lufthansa at a later date. The purchase price for the remaining shares will be based on the commercial development of ITA Airways". The contractual finalisation of the agreement is expected to be completed "shortly", the acquisition of the minority stake is subject to the approval of the relevant authorities.

Upon closing of this transaction, ITA Airways and the Lufthansa Group are expected to begin their commercial and operational cooperation immediately. As a network airline, ITA will 'cooperate closely with the Lufthansa Group to benefit from the synergies of the Group', of which it will be the fifth member after Austrian Airlines, Brussels Airlines, Eurowings and Swiss International Airlines.

As a member of the Lufthansa Group, ITA will remain an autonomous airline with its own management and strong brand identity - in line with the Lufthansa Group's successful multi-hub, multi-brand and multi-AOC strategy. At the same time, ITA "can benefit from the Group's synergies, such as access to the partner network, central revenue management and the use of the Lufthansa Group's global sales and marketing channels". Founded in November 2020 and with around 4,000 employees, the airline based at Rome-Fiumicino airport handles more than 10 million passengers a year, and operates a modern fleet of 66 Airbus aircraft. The Rome hub "is ideally located to further diversify ITA's network towards Africa and Latin America, offering its customers better connectivity with the southern hemisphere". ITA currently serves 64 destinations: 21 domestic, 33 regional and 10 intercontinental.

Italy "represents the largest market outside the Group's home countries and the United States. Italy is the EU's third largest economy in terms of gross domestic product, with a strongly export-oriented economy. This is one of the many reasons why business travel to and from Italy is so important.