Lufthansa and the Italian Ministry of Finance had been in private negotiations for quite some time now. The two parties have finally found an agreement on the sale of a minority stake in the new Italian flag carrier ITA Airways. Here’s what the deal is all about and what will change for the Italian airline and its passengers.
The Lufthansa ITA Airways Deal
The German flag carrier will be taking over, initially, a 41% stake in the new Italian flag carrier ITA Airways. Lufthansa will enter the company by a capital increase of 325 million euros. The MEF (Ministry of Finance) will be also inject into the business further 250 million euros.
Lufthansa also holds the right to purchase the remaining shares in a later moment. However the parties haven’t agreed on a fixed price for the remaining shares. The price will be evaluated according to the Italian carrier’s financial performances.
What Will Happen To ITA Airways
Lufthansa, via the Lufthansa Group, already manages 4 other major airlines:
- Austrian Airlines
- SWISS International Air Lines
- Eurowings
- Brussels Airlines
Therefore ITA will become the fifth airline to join the so called multi-brand multi-hub Lufthansa business model. In the short term there won’t be any drastic changes as the airlines is already quite streamlined with reduced staff and a modern fleet compared to the old Alitalia.
However progressively the airline will be more and more integrated into the LH ecosystem. The first step will be the integration with the Lufthansa booking systems. Allowing to book seamlessly trips across the group’s various carriers.
Also on a longer term the Italian airline will become part of the centralised aircraft purchase modus operandi that the Lufthansa Group brings forward.
ITA Airways’ Volare frequent flyer programme will definitely also change in some way. It will either be aligned or even possibly replaced by the Lufthansa Miles&More programme.
Finally there is the alliance situation to be addressed. ITA Airways is currently a Skyteam member, however it will surely move over to the Lufthansa-centric Star Alliance in coming months.
What Will Change For Passengers?
Some things but not all that much on the short term. Although ITA Airways was a Skyteam member, it was never fully integrated into the alliance. It was complicated to redeem miles with its quirky Volare programme and not possible to use it to book reward flights, let alone on other airlines.
There will probably be stronger and more frequent connections with the two main LH hubs in Frankfurt and Munich. Also from what transpires from the words of the LH CEO, there will be a particular focus in increasing operations in the southern hemisphere, i.e. South America. Possibly challenging other latin operators such as Iberia or TAP.
Expect also new flights to be launched to markets that traditionally have many tourists visiting Italy. Lufthansa will definitely try to leverage Italy’s major tourist destination status to drive revenue and assure ITA’s future success.
