Lufthansa (LH) Group, the Italian Ministry of Economy and Finance (MEF), and ITA Airways (AZ) have welcomed the EU Commission’s approval under competition law. This approval clears the way for Lufthansa to acquire a 41 percent minority stake in ITA Airways and later acquire the remaining shares.
Deutsche Lufthansa AG agreed to this deal for a capital contribution of 325 million euros in May 2023, and the investment will proceed through a capital increase. The transaction is expected to close in the fourth quarter of 2024, pending the implementation of remedies negotiated with the EU Commission and approval from other competition authorities outside the EU.
Lufthansa ITA Airways Acquisition
Lufthansa Group and MEF have agreed on options for acquiring the remaining shares in ITA Airways, which can be exercised from 2025 at the earliest.
After closing, ITA Airways will become the fifth network airline closely integrated with Lufthansa Group while retaining its brand name. As part of Lufthansa Group’s multi-hub, multi-airline, and multi-brand system, the Italian airline will benefit from synergies in areas such as worldwide sales, the Miles & More loyalty program, and aircraft and fuel purchasing.
This integration will strengthen ITA Airways’ economic position. Italy will become Lufthansa Group’s fifth “home market” and its second largest market by revenue after Germany and the USA.
Italy is already Lufthansa Group’s second most important market outside its home markets, following the USA. As the third largest economy in Europe, Italy boasts a strong export-oriented economy and is one of the world’s most popular vacation destinations.
Smooth Integration
Lufthansa Group and ITA Airways are planning a swift integration. ITA Airways, with nearly 5,000 employees, will enhance Lufthansa Group’s international and diverse corporate culture.
Rome-Fiumicino (FCO) will become Lufthansa Group’s sixth and southernmost hub, recently awarded five Skytrax stars.
After closing, the route networks will link through code sharing, allowing customers to combine the airlines’ offers. This will create over 1,000 new transfer options, expanding destinations in South America, North Africa, and the Middle East. ITA Airways will also enhance competition in Italy, which is currently dominated by low-cost airlines.
ITA Airways already emphasizes quality and a premium Italian service culture. Members of its loyalty program “Volare” will be able to collect or use their miles with Miles & More from the first day after closing.
Additionally, lounges will be mutually accessible. ITA Airways aims to join the Star Alliance soon. Commercial processes, IT systems, and purchasing processes will be harmonized quickly to maximize synergy effects.
CEO Remarks
Lufthansa Group CEO, Carsten Spohr stated, “
The acquisition of ITA Airways boosts Lufthansa Group’s international reach. We are offering our guests a significantly greater choice of connections and destinations, with the 5-star hub in Rome enhancing our premium offering and better connecting strategic markets south of the equator. Despite extensive concessions, investing in ITA Airways strengthens Lufthansa Group’s global competitive position. We will make ITA Airways a strong and successful part of our company, securing its future as an international airline and strong brand. ITA Airways will help us further solidify our position as the Number One airline in Europe.
Carsten Spohr, CEO of Lufthansa Group
Further, the integration of ITA Airways into the Lufthansa Group’s network will begin immediately after closing. Authority approval allows ITA Airways and Lufthansa Group to collaborate commercially and operationally from the transaction’s closing date.
Until then, both companies will continue to compete. After intensive negotiations with the European Commission, the parties have agreed on a package of concessions, including transferring slots at Milan-Linate Airport to a short-haul competitor. This competitor will also take over some routes between Italy and Lufthansa Group’s home markets where the airlines currently compete. Additional feeder flights from Rome to other European hubs will enhance competition on long-haul routes from Rome to North America.
Founded in November 2020, ITA Airways began operations on October 15, 2021, and currently has around 4,860 employees.
Based in Rome, the airline carried nearly 15 million passengers in 2023 and operates a modern fleet of 96 Airbus aircraft, including 23 long-haul and 73 short-haul planes.
The Rome hub is ideal for expanding the joint route network towards Africa and Latin America, providing customers with better connections to the southern hemisphere. ITA Airways currently serves 69 destinations.
Lufthansa City Airlines Operated its Inaugural Flight from Munich
The post Lufthansa 41% Acquisition of ITA Airways Gets EU Approval appeared first on Aviation A2Z.