by: Juergen T Steinmetz | copyright: eTurboNews – Travel Industry News – World Travel News
The proposal also comes with a future purchase option for any outstanding shares. The German airline conglomerate has submitted a proposal to purchase Italian Airline ITA to Italy’s Ministry of Economy and Finance. They hope to seal the deal with an MoU
The German Lufthansa Group already owns Austrian Airlines, Brussels Airlines, Eurowings, Lufthansa, and SWISS.
There would be discussions on the commercial and operational integration of ITA into the Lufthansa Airline Group and the ensuing synergies, as well as the form of a potential equity investment.
The airline said it would be contingent on regulatory clearance if a deal is struck.
According to a press release, “outside of its home markets and the US,” Italy is Lufthansa Group’s most significant market.
Previously, a group including Delta Air Lines, Air France-KLM, and the investment firm Certares competed with Lufthansa and the shipping corporation MSC to acquire ITA Airways.
ITA Airways is a member of SKYTEAM with this group.
The Italian government had initially favoured the second option. However, as the Delta-Air France-KLM-Certares consortium lost interest, Lufthansa was left as the only potential investor in the Italian carrier.
In October 2021, the then-Italian government agreed with the European Commission (EC) to spend up to €1.35 billion ($1.46 billion), giving birth to ITA Airways out of the ashes of Alitalia. When the total investment reached above €1.1 billion ($1.1 billion) in November 2022, there was little room for the government to help the airline stay afloat financially.
Local media sources stated that the worth of ITA Airways was projected to be between €450 and €480 million ($488 and $520 million) and that the Italian government was aiming to sign an MoU with Lufthansa to move the deal forward.
In addition, in late December 2022, local legislators issued a resolution that would enable interested parties first to put in an offer for a minority stake in ITA Airways and that only airline organisations would be permitted to bid for the struggling Italian flag carrier.
ITA Airways is a company totally owned by the Italian Ministry of Economy and Finance for the exercise of business in the air transport sector. The airline has been active since November 2020.
ITA Airways aims at creating an efficient and innovative air carrier that will become a reference point in providing Italy with quality connectivity with both international destinations, thus boosting tourism and foreign trade, and within the Country, also taking advantage of the train-air integrated mobility. ITA Airways will place the best customer service at the centre of its strategy (through a strong digitization of processes that ensure a best-in-class experience and personalised services), combined with sustainability, in its environmental (new green and technologically advanced aircraft, use of sustainable fuels), social (equality and inclusion for a gender-neutral company) and governance (integration of sustainability into internal strategies and processes) aspects.
ITA Airways will equip itself with a modern and environmental-friendly fleet that will include leading-edge technologies which will optimize efficiency and quality of service and significantly reduce the environmental impact.
At the beginning of operations, ITA Airways will operate a fleet of 52 aircraft, including 7 wide-bodies and 45 narrow-bodies aircraft. In 2022 the fleet will rise to 78 aircraft (+26 vs 2021), including 13 wide-bodies (+6 vs 2021) and 65 narrow-bodies (+20 vs 2021). From 2022, new-generation aircraft will gradually join the fleet replacing old technology aircraft. At the end of 2025 the fleet will rise to 105 aircraft (23 wide-bodies and 82 narrow-bodies), with 75% of new-generation aircraft.
ITA Airways will focus its business on the Rome Fiumicino hub and Milan Linate airport where it will position itself as the reference airline for business and leisure traffic. At the beginning of operations, the airline will fly to 44 destinations with 59 routes, growing to 74 destinations and 89 routes by 2025, at the conclusion of the rebalancing process of flights towards the long-haul sector, which is aimed at bridging the connectivity gap of the Country.
Sustainability and digitization are two key elements of the industrial strategy of ITA Airways .
A series of actions, in terms of reducing the environmental impact, promoting creation of an inclusive culture and integrating sustainability into internal strategies and processes will be implemented in order to pursue ambitious ESG objectives that will allow ITA Airways to be the greenest airline in Europe and a gender-less and merit-based air carrier.
ITA Airways will strongly focus on digitization, in fact substantial investments are planned in digital systems and platforms in order to guarantee a quality travel experience to the customer, as a distinctive element of the offer, and develop a data driven company with flexible and lean organization whose foundations are based on the data analysis and understanding, as well as on the value of its human capital.
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