Following years of negotiations, the Lufthansa Group is set to complete its acquisition of ITA Airways next week. The acquisition will bring the Italian carrier into the company with numerous other European airlines, allowing it to develop in a number of crucial areas.
Only a few days to go
Lufthansa has been in extensive discussions about adding ITA to its ever-expanding list of subsidiaries. According to a source familiar with the subject, the transaction is likely to close on January 13. The date was initially reported by DPA news agency after being revealed by Lufthansa CEO Carsten Spohr at an employee gathering.
While there has been no formal statement from the airline, a Lufthansa representative has confirmed that the transaction is likely to finalize in early 2025.
It has hardly been over a month after Lufthansa and the Italian Ministry of Economy and Finance (Ministero dell’Economia e delle Finanze, MEF) passed the final regulatory barriers, with the European Commission (EC) allowing several remedy takers following the acquisition.
Lufthansa will purchase a 41% stake in the Rome-based carrier for €325 million, with the option to purchase the remaining shares later. The German national carrier believes the deal will help ITA Airways return to profitability while Lufthansa expands in crucial regions.
$338 million capital increase
Last month, during its “Extraordinary Shareholders’ Meeting,” ITA Airways authorized a $338 million capital boost for Lufthansa. The group was given until January 15, 2025 to subscribe to the increase, which would allow it to enter ITA Airways with an initial 41% ownership.
During the meeting, the new company bylaws were also approved, which included particular prerogatives and powers for its operations that were assigned to the two shareholders – the Italian Ministry of Economy and Finance and Lufthansa – and govern the airline’s joint management.
According to ITA Airways, the new company rules will take effect when Lufthansa participates in the capital increase, following which an ordinary shareholders’ meeting would be called.
During the meeting, shareholders will elect a new Board of Directors, which will carry out the agreements agreed in June 2023 and establish the airline’s new governance framework.
Lufthansa-ITA Airways remedies
The European Commission (EC) authorized easyJet, Air France-KLM, and the International Airlines Group (IAG), which is the parent company of British Airways, Iberia, Aer Lingus, Vueling, and Level, as remedy takers for short- and long-haul flights to and from Italy approximately one month prior to the “Extraordinary Shareholders’ meeting.”
The joint shareholders agreed to make assets available and transfer slots at Milan Linate Airport so that easyJet could expand its operations.
The low-cost carrier has previously announced a considerable capacity expansion, with two new facilities at Linate and Rome Fiumicino. The shareholders also decided to allow Air France-KLM and IAG to increase flights from Italy to the United States.
Following the acquisition of ITA Airways, the Lufthansa Group will now include five network carriers: Austrian Airlines, Brussels Airlines, ITA, Lufthansa, and Swiss. The group includes several other airlines and organizations, such as Edelweiss, Eurowings, Discover Airlines, Global Load Control, LSG Sky Chefs, and Lufthansa Technik.
ITA’s network under Lufthansa
Following the EC’s final approval of the acquisition late last year, insiders revealed Lufthansa’s preliminary network plans for ITA Airways, which include improving connectivity to major markets, expanding the hub-and-spoke model, and reducing loss-making routes.
One of the targets is Africa, where the business already has a strong footprint and is developing through its numerous network carriers. The airline is also considering expanding into the Americas, with planned flights to Bogotá, Colombia, and enhanced seasonal frequencies to Brazilian locations.
Lufthansa will also seek to expand connections and transit passengers through ITA’s hub in Rome, with a focus on Eastern Europe to facilitate connections to the United States. However, the complete integration of ITA Airways into the Lufthansa Group will take at least two years.
FAQ
What is the ITA Airways deal that Lufthansa is completing?
Lufthansa is finalizing a deal to acquire a majority stake in ITA Airways, Italy’s national carrier. This move is part of Lufthansa’s strategy to expand its presence in the European airline market.
When will Lufthansa complete the ITA Airways deal?
Lufthansa expects to complete the ITA Airways acquisition deal by next week, finalizing the purchase of the majority stake in the Italian airline after months of negotiations and regulatory approvals.
What does Lufthansa’s acquisition of ITA Airways mean for passengers?
The acquisition is expected to strengthen Lufthansa’s network in Italy, providing passengers with more flight options to and from Italy, improved connectivity, and access to Lufthansa’s European and global routes.
How will ITA Airways change after the Lufthansa deal is completed?
After the deal is completed, ITA Airways is expected to integrate with Lufthansa’s operations, which could result in fleet upgrades, enhanced services, and expanded international routes under the Lufthansa Group umbrella.
Why is Lufthansa acquiring ITA Airways?
Lufthansa’s acquisition of ITA Airways is part of its broader strategy to strengthen its position in the European aviation market, increase its market share, and expand operations in key regions like Southern Europe and Italy.
