The Italian government is looking to finalize an agreement with ITA Airways and Lufthansa by mid-April, finally privatizing the airline.
According to reports by the Italian newspaper Corriere della Sera, sources familiar with the matter indicate that the local government is looking at a deadline of between April 19 and April 21, 2023, to finalize the deal between itself, ITA Airways, and Lufthansa.
The government expects to finalize the deal and clear any regulatory hurdles, including the European Commission (EC) at the end of July or at the start of August 2023. Initially, Lufthansa would take a 40% stake in the still-ailing Italian airline, with the plan to fully privatize ITA Airways in the coming years.
Lufthansa made an official bid for ITA Airways in January 2023, when the German airline group announced that it had approached the Italian government, the current owner of the carrier. “These talks would primarily focus on the form of a possible equity investment, the commercial and operational integration of ITA into the Lufthansa Airline Group, as well as resulting synergies,” read Lufthansa’s announcement at the time.
Previously, the total value of ITA Airways was between €450 and €480 million ($489 and $521 million), with Corriere della Sera indicating that the 40% stake would set Lufthansa back between €200 and €250 million ($217 and $271 million). However, since ITA Airways finished 2022 with a net loss of €486 million ($528 million), the losses now have to be taken into account, indicated the Italian daily.
ITA Airways, which began operations the same day that Alitalia, another state-owned carrier that closed down its doors in October 2021, has posted two years of consecutive losses. The airline’s recent financial results announcement argued that the figures in question are “consistent with the ‘start-up’ phase of the company” and should be considered in the context of COVID-19-related travel restrictions in 2021 and the beginning of 2022, as well as rising fuel prices due to Russia’s invasion of Ukraine. However, the Italian government has been looking to privatize the airline ever since its inception.
Initially, Lufthansa was joined by the shipping company MSC, competing against a consortium of Air France-KLM, Delta Air Lines, and United States (US)-based investment firm Certares. However, Lufthansa now remains the only interested party.