Alitalia’s successor airline needs a strong partner to survive. But the government crisis in Italy delayed a decision.
(Photo: NurPhoto/Getty Images)
The situation is strange again: Italian Prime Minister Mario Draghi allegedly wants to announce the sale of the state airline ITA to the duo Lufthansa and MSC – but on the same day a serious government crisis breaks out in Rome. So far, no major deal in aviation has been stopped more abruptly. When and if the sales process will start again is completely open.
Politicians have crushed the plans of the ITA’s predecessor, Alitalia, between the fronts umpteen times. Now the Italian state airline and thousands of employees are hanging in the air again because the parties are unable to give the country a stable government over the long term.
The Lufthansa leadership is determined to gain a stronger foothold in Italy. It is one of the Group’s most important European markets. In view of the constant political upheaval, the management in Frankfurt should seriously consider whether they would rather not expand in Italy on their own.
Of course, an ITA deal has a lot of charm. It’s the country’s new national airline, Lufthansa wouldn’t need to build an airline with some sort of Italian DNA first. Group management has known how difficult this is since 2011 at the latest. Lufthansa Italia failed after less than three years.
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Also, the ITA can no longer be compared with the Alitalia. The company has thrown off many legacy issues, and even the powerful trade unions have recently shown themselves willing to compromise. In addition, there are valuable traffic rights that Lufthansa would secure.
But the renewed government crisis shows how fragile the whole construct is. The state wants to stay on board with the ITA, and Lufthansa and MSC had to accept that.
Depending on which political color is in charge in Rome, it could quickly become uncomfortable for Lufthansa and MSC. Because Italian politics is unpredictable and unreliable.
For a company, this is pure poison. Even if Lufthansa and MSC were to be awarded the contract, both would have to reckon with the government wanting to assert its own national interests.
Lufthansa could also expand its Italian business on its own. The subsidiary Air Dolomiti is an established brand in Italy and flies there with great success. In order to score more points in Italy, Lufthansa could upgrade the offshoot with modern and more efficient aircraft. Such plans have existed for a long time.
Now would be the right time to pull them out of the drawer.
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