Frankfurt, Rome Lufthansa gets nothing from the privatization of the Italian state airline ITA Airways. The government wants to conduct exclusive negotiations with the US financial investor Certares about a majority stake in the successor airline to the insolvent Alitalia. This was announced by the Italian Ministry of Finance on Wednesday. Behind Certares are Air France-KLM and Delta Air Lines from the USA.
However, the hopes of a surcharge in the Frankfurt headquarters had already fallen in the past few days, according to management circles. The reason: Giorgia Meloni’s post-fascist Fratelli d’Italia party has a good chance of becoming the strongest party in the forthcoming new elections on September 25. The 45-year-old is considered Germany-skeptical.
Acting Prime Minister Mario Draghi himself is said to have preferred Lufthansa and MSC. And Lufthansa also had many supporters in Italian aviation. ITA board chief Alfredo Altavilla promoted the alliance just as much as Rome’s airport chief Marco Troncone. “The choice of Lufthansa seems to me to be very convincing for Italy, because it has proven with airlines like Swiss and Brussels that the concept works,” he explained in an interview with the Handelsblatt.
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According to aviation circles, not everyone in Draghi’s multi-party government was in favor of this solution. There are said to be powerful voices in the Ministry of Finance calling for the government to have a permanent say in the ITA.
>>Read about this: Giorgia Meloni threatens to shake Lufthansa’s plans for the ITA takeover
And this is exactly what Certares offers. The offer stipulates that the state will retain a 40 percent stake. He would have twice as many shares as in the MSC-Lufthansa offer. According to information from industry circles, the Lufthansa consortium offered around 850 million euros for 80 percent, Certares around 600 million euros for 60 percent.
Even with a 20 percent share of the state, the Lufthansa leadership around CEO Carsten Spohr should have feared that representatives of a nationalist government would get involved in ITA in the future. “That has significantly depressed the value of such a deal,” said one executive.
How things will continue for Lufthansa in Italy
“We continue to believe that our offer with MSC would have been the better solution,” Lufthansa said on Wednesday. “But apparently one goes the way with more state influence and no complete privatization.”
The cancellation is a setback for the group. Both Spohr and the chairman of the supervisory board, Karl-Ludwig Kley, are big fans of Italy. Both have repeatedly emphasized the great importance of the market in the past. Italy is the most important European foreign market, Spohr explained the great interest in the ITA.
Spohr wants to define a strip as a home market that stretches from Scandinavia through Germany, Austria, Switzerland, the Czech Republic down to Italy. Here the management wants to score points with a network that is as dense as possible and at the same time try to keep competitors away.
The ITA hub Rome-Fiumicino could have become Lufthansa’s so-called smaller hub alongside Vienna and Brussels. There, Lufthansa does not rely quite as much on the complex and expensive transfer traffic as in Frankfurt and Munich, but nevertheless integrates these airports closely into the long-haul network of the group.
The CEO of Europe’s largest airline group sees a lot of potential in Italy. After the cancellation of the ITA takeover, he will probably rely more on his own Air Dolomiti.
(Photo: Reuters)
How is the market going? Lufthansa will probably rely more on its own Air Dolomiti again. The Germans have been operating the branch in Italy for several years. However, previous attempts to expand the presence have failed.
There have long been considerations to expand the fleet of the offshoot.
>>Read about this: Rome Airport wants to become a Lufthansa hub – and be the first in Offer air taxis in Europe
On the other hand, there is a traditionally close connection in aviation between Italy and France. Air France-KLM, Certares’ partner, had a stake in Alitalia for several years and had always expressed great interest in the successor ITA.
However, Air France is not allowed to bid directly for ITA. The state aid granted during the pandemic has not yet been repaid, which is why the EU Commission is prohibiting large takeovers. This is probably one of the reasons why the special construct with a financial investor was chosen.
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