ITA Airways Begins Losing Money Again

ITA Airways has slipped back into the red with confirmation of a loss across the first half of 2026 as Lufthansa Group moves ahead with majority control at the Italian carrier.

Founded to replace Alitalia, ITA has become more heavily exposed to currency and leasing-related factors this year, even if there are operational improvements to be felt.

How big is the loss at ITA Airways?

For the first half of 2026, ITA Airways reported a net loss of €141.5 million. On Lufthansa’s books, this translated into a negative equity contribution of €58 million, compared with a positive €84 million in the same period last year.

The deterioration in ITA Airways’ financial performance has largely been attributed to exchange rate effects on aircraft leasing liabilities. Lufthansa’s half-year report flagged the result and showed negative currency effects of €32 million related to the measurement of lease obligations.

That negative currency effect contrasts with the positive €116 million impact in the prior year and shows the evolving landscape and how it can hit an airline. The swing of a near €150 million has turned previous positive financial reports into more of a drag across 2026.

However, despite this fresh pressure point, ITA’s operational stance continues to improve, with an operating profit of €37 million in the second quarter and €4 million for the half‑year. That means that, at its current operating level, it is marginally profitable over six months and through a period of heavy volatility.

Unfortunately for ITA Airways, the gains it has made on operations have been overwhelmed by some of the non-operating items, such as currency effects and leasing, hurting the bottom line.

A One-Off For ITA Airways?

Lufthansa’s report for Q1 2026 flagged ITA Airways as a potential source of negative financial impact on the Adjusted EBIT at the time, noting that equity results could ultimately deviate from the plan, and the numbers have now supported that further.

While the first-half numbers show the airline’s vulnerability, the pressure points have been volatile and largely external factors rather than the core business itself, thus limiting the immediate long-term cause for concern.

The swing in exchange rates has been felt at other airlines reporting their second-quarter and first-half results; the leasing angle is tied heavily to pressure beyond just the increase in fuel prices. ITA is impacted because transactions in U.S. dollars dominate its leases, but its currency reporting is in euros.

As a result, when the euro weakens against the dollar, the value of those leases rises and produces a more negative effect; the opposite can happen if the euro were to strengthen, and that means that quarter by quarter and year over year the outgoings can change.

ITA Airways is still a young airline too, with higher costs and a necessity to build out its network, which is still developing; experiencing volatility in outgoings is common. The net loss is much smaller in the second quarter than the half-year figure; at just €29 million, indicating some stabilisation.

Lufthansa Moves Forward With Takeover

Despite dipping back into the red, Lufthansa has not slowed down its path to taking over ITA Airways. In Q2, the company confirmed that it had exercised an option to acquire a majority stake in ITA Airways, increasing holdings from 41% to 90% with the additional purchase of 49% from the state for €325 million.

The transaction is currently expected to close in Q1 2027; however, it remains subject to approval from the European Commission and the U.S. Department of Justice. But once completed, ITA Airways will move from full consolidation in Lufthansa’s financial statements.

The German company has also indicated that it has the purchase option to take the stake up to 100% in 2028 if it chooses, signalling a long-term commitment to fully integrating ITA into its network and making the deal a mere formality.

Lufthansa, when first expressing interest in purchasing ITA Airways, didn’t hold back with its efforts to push for a full takeover. The German group, having notoriously struggled in the Italian market, saw ITA as a solution and a way to expand its network.