Although there are no official announcements yet, it appears that Lufthansa and the Italian government are only days away from finalizing the deal that will give Lufthansa 40% of the stock of ITA Airways, with a path to eventual full ownership.
Meetings late last week between Lufthansa and Italy’s Economy Minister were described as ‘positive’ by a Treasury spokesman. Lufthansa’s ‘exclusivity’ period for negotiations ends April 24, and many believe the deal will be formalized by then.
ITA Airways is the state-owned (and loss-making) successor to the former (loss-making) privatized Alitalia. ITA began operating in late 2021 after the bankruptcy of Alitalia and the end of many attempts to sell the airline. Ironically, ITA bought the rights to Alitalia’s name and logos as one of its first acts, and it has been reported that Lufthansa plans to revive the name.
The reported deal involves Lufthansa paying €250-300 million for 40% of the stock, with an agreed path for purchasing the balance over time; Italy’s present and previous governments, while anxious to get out of the airline business have both wanted to have some say in the airline’s planning.
Meanwhile, another potential airline merger is moving closer to reality, with airlines lining up to bid for control of TAP Portugal, which was nationalized during the pandemic slump. While the government has said it wants to sell, it hasn’t yet taken the step of asking for bids.
Likely bidders are International Airlines Group, parent of British Air, Iberia, Vueling and Aer Lingus, and AirFrance/KLM, possibly with Delta as a partner. IAG has already hired legal and communications representatives to prepare a bid, and the AirFrance group is reported to be ready to hire, too. Lufthansa has also expressed interest, but is an unlikely bidder so soon after its ITA bid.
