Lufthansa Group expects to close its deal to acquire a 41% stake in ITA Airways in the fourth quarter after securing conditional European Commission clearance for the transaction.
The German airline group will carry out the acquisition through a capital of contribution of €325 million ($349 million), as agreed in May 2023, via a capital increase. The transaction is conditional on the implementation of remedies agreed with the Commission to address competition concerns.
While Lufthansa is initially taking a 41% stake, it also holds options to acquire the remaining shares in the Italian carrier. These can be exercised from 2025 at the earliest.
Lufthansa Group chief executive Carsten Spohr says: “The approval from Brussels is excellent news for ITA Airways and Lufthansa and especially for all passengers flying to and from Italy. The decision is also a clear signal for strong air traffic in Europe, which can successfully assert itself in global competition.”
In giving the tie-up the green light, the Commission is requiring Lufthansa and the Italian finance ministry give up assets to rival operators to address competition concerns on short-haul and transatlantic routes.
”This essentially includes the transfer of slots at Milan Linate airport to a competitor in short-haul traffic,” Lufthansa says. ”In the ’neighboring traffic’ between Italy and the Lufthansa Group’s existing home markets, this competitor will take over single routes on which Lufthansa Group airlines and ITA Airways still operate today as competitors.”
It adds that additional feeder flights from Rome to hubs of European competitors will also ensure improved competition on long-haul routes from Rome to North America.
Spohr says: ”Despite the comprehensive and far-reaching concessions, the investment in ITA Airways strengthens the Lufthansa Group’s position in global competition. We will make ITA Airways a strong and successful part of our company and thus secure its future as an international airline and strong brand.”
The approval of the authorities enables the co-operation between ITA Airways and Lufthansa on a commercial and operational level from the date of closing of the transaction. Until then, both companies will continue to act in competition.
Rome Fiumicino will become the sixth and southernmost hub within the Lufthansa Group, alongside its existing operations from Frankfurt and Munich in Germany, Zurich in Switzerland, Austrian capital Vienna and Brussels in Belgium.
ITA began operations in October 2021, succeeding Alitalia as Italy’s national carrier. Last year it flew almost 15 million passengers. It operates a fleet of 96 Airbus aircraft, including 23 widebodies, serving 69 destinations.
