Lufthansa-ITA deal is finally sealed

Lufthansa and the Italian government have agreed to take over ITA Airways, formerly Alitalia, after tough negotiations, the Italian Finance Ministry announced.

The documents were delivered to the European Commission before the deadline. The EC had previously imposed conditions on the deal to safeguard competition, such as giving up some flight rights or slots.

€325 million

Under the agreement, Lufthansa will initially acquire a 41% minority stake in state-owned airline ITA – Italia Trasporto Aero – for 325 million euros, with the option to increase its stake to 100% in the medium term.

The deal was unexpectedly delayed last week after Lufthansa asked for a 10 million euro discount on the price of a 49% stake. According to the German airline group, the value of the Italian carrier had fallen since the original 2023 deal.

The Italian government opposed the demand, leaving the deal uncertain in the final stages of negotiations. However, the most significant sticking points are said to have been resolved by the November 11 deadline, without touching economic conditions, allowing the deal to go through after all.

Third largest market in EU

ITA’s predecessor, Alitalia, went bankrupt and was taken over by the Italian state in 2020. After a significant reorganization, Rome began looking for take-over candidates for ITA.

The sale of ITA would allow Prime Minister Giorgia Meloni to finally eliminate an airline that had been running on state aid for years—Alitalia cost the Italian government billions in subsidies for decades.

With Lufthansa’s entry into ITA, the group is adding a new airline to its subsidiary brands. In addition to Eurowings, Lufthansa also owns Austrian Airlines, Swiss International Air Lines, Discover Airlines, and Brussels Airlines.

The entry into ITA also gives Lufthansa access to the Italian market, which is the third largest in the EU.