Lufthansa submits new bid for Italy’s ITA Airways

Alade Abayomi ADeleke
Alade Abayomi ADeleke

Bisola Fatoye

On Wednesday, the world’s largest airline, Lufthansa, made a new offer for the struggling ITA Airways of Italy, bringing the tumultuous acquisition process closer to its conclusion.

According to Lufthansa’s plan, the airline would first acquire a small part in the state-owned ITA, with the option “to purchase the entire shares at a later date,” the airline stated in a statement.

According to Bloomberg News, Lufthansa could pay up to 350 million euros ($375 million) for a 40% interest. The sale of the bulk of ITA Airways, which replaced the nation’s flag carrier Alitalia, was incurring losses and was started last year by Italy’s previous government.Under former prime minister Mario Draghi, the government initially favored an offer from US investment fund Certares, Delta Air Lines, and Air France-KLM. However, after those talks stalled, Italy’s new right-wing government led by Prime Minister Giorgia Meloni stated in late October that the exclusivity period had ended, re-entering Lufthansa into the race.It has always been known that the German group, which also controls Swiss, Brussels, and Austrian Airlines, is interested in a “real privatization” of ITA Airways.

MSC, a major Swiss shipping company, had partnered with Lufthansa in the initial round of bidding but announced its withdrawal in November, allowing Lufthansa to pursue the ITA transaction on its own.

Air France-KLM announced on Wednesday that it had told the Italian authorities that it was also withdrawing from the competition, making way for competitor Lufthansa. By providing direct flights from the United States, its biggest market, to Italy, Lufthansa intends to establish Rome as a major hub in Europe.

Outside of its home markets and the US, Italy is the most significant market for Lufthansa Group, according to the airline.

Italy’s significance for both business and leisure travel may be attributed to both its robust export-oriented economy and its position as one of Europe’s top tourist destinations.

The national carrier Alitalia was succeeded by ITA Airways, which was placed under state administration in 2017 following years of futile efforts to find a buyer.

Over 13 billion have been spent by the Italian government.

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