Is Lufthansa a possible rescuer for Alitalia?

Italy is facing an important transition: the former European Central Bank president, Mario Draghi, has accepted to form a coalition government to lead Italy out of a severe economic and health crisis. One of Draghi’s most urgent jobs is to find a solution for Alitalia’s ongoing financial crisis. Once again, Lufthansa seems to be at the forefront of the rescue plan. But is it really the case? 

Possible return of Lufthansa as Alitalia’s rescuer?

Alitalia has been in special administration since May 2017. Since then, different proposals have been made to save Italy’s national airline. While easyJet and Delta backed out of the deal, it’s been said that Lufthansa seems once again interested in buying Alitalia’s assets. 

Meanwhile, Alitalia’s cash seems to have run out, meaning that the newly born Italian government needs to act fast. It will not be an easy decision to make; many workers will most likely lose their jobs. What is clear now is that the E.U. Commission for Competition is demanding discontinuity with the old Alitalia to give the go-ahead to the three billion loans the former Italian government, led by ex-PM Giuseppe Conte, destined for the Italian carrier. 

A Lufthansa A380-800 at Frankfurt Int. Airport

Alitalia rescue: what are the next steps? 

As far as the Alitalia rescue plan is concerned, the first step is to transfer all of Alitalia’s assets – including planes, employees, the brand, frequent flyer programme MilleMiglia, Alitech, maintenance workforce and so on – to Alitalia Cityliner. Secondly, Alitalia Cityliner will be ceded to the Ministero dell’Economia e delle Finanze (MEF), the Italian Ministry of Economy and Finance. This way, Alitalia would settle its debt towards the Ministry. Lastly, Lufthansa would take over Alitalia Cityliner or Alitalia ITA, the newco designed by the former Italian Government. 

However, once all of Alitalia’s assets are transferred, the Italian government will have to call for tenders, since it cannot cede public assets without a tender. This is why such a rescue plan still raises some doubts about its feasibility. 

Is Lufthansa really into this plan? 

Lufthansa’s reaction towards this news was one of astonishment. At the time being, in fact, the German national carrier cannot buy more than 10% of any airline. The German government gave a nine billion loan to the national flag carrier to help the management overcome the crisis induced by COVID-19. Therefore, the EU Commission imposed a clause to the German carrier: until Lufthansa gives back 75% of the recapitalisation, it is not allowed to buy more than 10% of other airlines’ shares. 

Even though Lufthansa has already started to pay back part of the loan, it is not enough to put Alitalia’s rescue plan into practice. 

A Lufthansa A350 moments before landing

A recap of the situation

On Tuesday 23 February, Alitalia’s commissioner, Giuseppe Leogrande, will meet with Italian trade unions in Rome to discuss Alitalia’s current situation. On the agenda, there is the go-ahead of the EU Commission for the last tranche of Covid-related three billion loan and the fact that Alitalia’s cash has run out, meaning that the airline will not be able to pay its employees at the end of the month. The call for tenders, on which commissioner Leogrande is working, will also be discussed.

What about you? Do you think a deal between Lufthansa and Alitalia will ever come true? 

Subscribe to our Weekly Digest!

More News

Giacomo Amati
Giacomo Amati
Aviation Reporter - Giacomo has been passionate about commercial aviation since his very childhood. Currently, he is pursuing a Master in Air Transport Management at the University of Surrey, UK. His expertise within the industry entails an internship with Emirates Airlines in Milan Malpensa airport and a bachelor's thesis on the financial status of the former Italian national carrier, Alitalia. Besides aviation, Giacomo loves foreign languages, German being his favourite one, and travelling.


Please enter your comment!