Lufthansa, Europe’s largest airline group, will exercise its option to increase its stake in the Italian airline ITA Airways from 41% to 90%. The German airline group will pay 325 million euros for the second tranche.
The transaction is expected to be completed in the first quarter of 2027. In 2028, Lufthansa will be able to purchase the remaining 10% from the Italian government.
5th network carrier
ITA Airways, born from the ashes of the former Italian national airline Alitalia, is the fifth ‘network carrier’ in the German aviation group’s portfolio, alongside Lufthansa Airlines, Swiss, Austrian Airlines, and Brussels Airlines.
However, the transaction still needs to be approved by the European Commission and the US Department of Justice – the latter due to the so-called A++ transatlantic joint venture.
The A++ joint venture allows member airlines to coordinate networks and share revenue, a significant competitive advantage on transatlantic routes. United Airlines, Lufthansa, and Air Canada are already members, and ITA Airways wants to join.
This requires special ‘antitrust immunity’ from the US government. In that context, ITA or Lufthansa will likely have to make concessions, such as releasing slots on routes like Rome-New York to competitors.
“Following the acquisition of the first 41% stake in ITA Airways last year, we promised the fastest airline integration in our history”, said CEO Carsten Spohr. “We aimed to complete all major integration steps into the Lufthansa Group within just 18 months. We have not only kept this promise. We were even faster: All customer-facing interfaces are already integrated today, with the exception of North Atlantic flights, where, as is well known, regulatory approval for our merger is still pending.”
ITA Airways operates a uniform fleet of 99 aircraft (22 wide-body and 77 narrow-body), over 60% of which are new-generation models and meet the very latest standards, including in terms of kerosene consumption and thus CO2 emissions.
More expansions on the horizon?
Meanwhile, Lufthansa is also in the running for a minority stake in airline TAP Air Portugal. It faces competition from the Franco-Dutch group Air France-KLM.
Lufthansa’s existing hubs – Frankfurt, Munich, Zurich, Vienna, and Brussels – are all located in Central and Northern Europe. By acquiring Southern European hubs, it can consolidate its presence in that region and expand its long-haul network via Rome and Lisbon.
Especially, TAP is a gateway to Latin America (especially Brazil) and Portuguese-speaking Africa.
