German carrier, Lufthansa has been given the green light by the European Commission to acquire a controlling stake in Italian flag carrier, ITA.
Details are scarce, with neither one making an official comment – however, the deal, initially announced in 2022, was finally approved on 29 November 2024, and will see Lufthansa becoming ITA’s primary shareholder after the Italian government agreed to relinquish its own stake in the carrier.
It will take around two years for ITA to become fully integrated into Lufthansa, with the German airline using the acquisition to expand its market and routes into South America, specifically using Rome’s Fiumicino Airport’s already existing route to Bogota in Colombia, forming a competition with Air France and Iberia, who already fly to the region.
Meanwhile, Lufthansa also announced an interest in acquiring Portuguese government-owned TAP Air, as well as investing in Latvian flag carrier airBaltic. The move is seen as a move to improve the airline’s presence in Eastern Europe, a region in which it has struggled to gain traction up to this point.
Good News for easyJet
In what has been called a ‘remedy maker’, as part of the agreement between Lufthansa and the European Union, both Lufthansa and ITA have been ordered to relinquish a number of routes from Rome and Milan to a selection of destinations around the world.
The main parties involved are Air France-KLM, International Airlines Group (a group formed between British Airways and Iberia), and easyJet. Easyjet has immediately announced that they plan to open a base at Rome Fiumicino and Linate Airport in Milan.
The British low-cost airline currently has two bases in Italy – at Milan Malpensa and Naples Capodichino – and is clearly keen to expand its presence in the country.
Meanwhile, International Airlines Group and Air France-KLM have agreed to take over ITA’s international routes, specifically between Italy and North America.
Who Are ITA?
Italia Trasporto Aereo (ITA) was formed out of the ashes of Italy’s original flag carrier Alitalia. Formed in 1946 Alitalia was wholly government-owned until 2009 when it merged with bankrupt Italian airline, Air One. Further investment came four years later when Etihad and Air France-KLM bought minority shares.
There had been plans for further investment, notably from Delta Airlines, easyJet, and China Eastern Airlines. However, in 2020, ITA was nationalised again, with the Italian government unsure the airline would survive the pandemic otherwise.
By September 2021, they had reached an agreement with Airbus to purchase 10 A330neos, 7 A320s, and 11 A320neos. Meanwhile, ITA also stated that they would lease 31 new Airbus aircraft from Air Lease International.
By January 2022, Lufthansa (initially along with the shipping company Mediterranean Shipping Company) had expressed a desire to invest in the company. At the same time, Delta Airways returned with its own bid, along with Air France-KLM. Finally, investment firm Indigo Group announced an intention to invest.
As of August 2022, the Italian Government stated that their preferred bidder was Air France-KLM. However, by January 2023, Lufthansa had become the exclusive bidder, with a plan to initially invest a minority stake in the airline, before incrementally buying out the rest of the shares.
At this point, with agreements in place between Lufthansa, ITA, and the Italian government – the sale was required to be finalised by the European Commission, which takes us up to the present day.
What do you think about the upcoming changes? Are you sad to see ITA disappear from the skies, or are you excited to see what the new competition will bring? Let us know in the comments below.
