Will bidders lose patience with Italy asking for revised bids for ITA Airways?

Italy has asked investors interested in ITA Airways to come up with better bids for the Italian airline, because the current bids are not good enough. 

Economy minister Daniele Franco told a press conference in Italy on August 4, 2022, that neither of the two bids on the table met all of Italy’s goals for the privatization of the state-owned carrier. The two rival bidders will therefore be asked to formulate further proposals, reported Italian news agency Ansa.  

Two groups of bidders have made offers for ITA, the successor to loss-making Alitalia - shipping group MSC has partnered with Germany’s Lufthansa (LHAB) (LHA), while Air France-KLM and Delta have formed a consortium with US private equity firm Certares.  

However, Italy may have to be careful not to deter prospective investors. Lufthansa (LHAB) (LHA) chief executive Carsten Spohr said on August 4, 2022, that the German airline wouldn’t wait around forever.  

“We believe we need to be fast here. Our patience is not endless,” Spohr told analysts after the airline reported second-quarter results. “They need a partner and we are the right one,” he added, noting how ITA’s unions were also pushing for a fast decision. 

Spohr said Italy was one of the most important markets for Lufthansa (LHAB) (LHA) and the group was experiencing a successful summer there. It has therefore decided to add extra aircraft to its Air Dolomiti unit, depending on what happens with ITA, in order to strengthen its position there.  

“We need a stronger position in Italy, one way or another, hopefully, together with ITA or otherwise with our own means,” he said. 

Alitalia ceased operations in October 2021 after failing to find a buyer to help it out of its financial difficulties.  ITA took over where Alitalia left off with a slimmed down fleet and route network and the government swiftly started efforts to find a new owner.  

ITA showed off one of its brand-new Airbus A350 aircraft in its distinctive blue livery at the Farnborough Airshow in July 2022.