Lufthansa-ITA Airways tie-up nears after meeting in Rome

Italy’s government said on Thursday negotiations were progressing with Germany’s Lufthansa over the sale of a minority stake in ITA Airways after the two companies jointly approved the Italian carrier’s industrial plan. Talks in Rome between Economy Minister Giancarlo Giorgetti, Lufthansa CEO Carsten Spohr, and ITA Chairman Antonino Turicchi were “positive,” a Treasury statement said, with the three discussing plans for the state-owned carrier.

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A source close to the matter, who asked not to be named, said a deal could be closed by mid-April. The exclusivity period ends on April 24, although the deadline is not binding. The Italian Treasury statement said the industrial plan would determine the future of ITA “in terms of fleet, network and strategic goals”, with analysts seeing the merger with a stronger rival as the only option for the company.

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ITA, which took to the air in 2021 as the successor to loss-making Alitalia, posted a 2022 loss of around 486 million euros ($530.5 million) due to lingering effects of the pandemic and rising fuel costs, despite strong revenue of 1.58 billion euros. Sources have said the German carrier is negotiating with Rome over the purchase of a 40% stake in the airline valued at around 200 million euros, with the idea of buying the rest at a later stage.

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Lufthansa’s Spohr told journalists on Wednesday that final negotiations for the takeover of ITA Airways were focusing on price, given the ongoing losses at the Italian carrier. Late in December, the Italian right-wing government of Giorgia Meloni laid down conditions for selling a stake in ITA Airways, looking to facilitate a full divestment, and stipulated that another airline must end up with a majority in the airline. A letter of intent between the Italian government and Lufthansa was signed in January, but financial details of the discussions have not been officially disclosed so far.

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Source: Reuters

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