Lufthansa Wins Approval To Buy Into ITA Airways

Lufthansa Group has successfully obtained formal approval from the EU to integrate ITA Airways into the business after lengthy talks.

The stake, valued at 41% and worth some USD 350 million, gained antitrust approval after much deliberation and adjustments to get the deal through.

Lufthansa Group had long explored acquiring ITA to enhance its airline portfolio and gain a firmer grip on Italy. Historically, this country is somewhere the group hasn’t held as large a presence and has struggled.

Now, with greater access to Rome Fiumicino, a hub for ITA, there are more opportunities to serve markets such as Africa and Latin America alongside other regions.

Furthermore, the addition of ITA Airways to the Lufthansa Group is expected to help the company continue its market growth in Europe. The Group is facing considerable threats from other groups, such as International Airlines Group and Air France-KLM, and is also looking towards consolidation.

While regulators often scrutinize consolidation, airline groups and associated parties have long highlighted its benefits and pushed for its implementation.

The approval from Brussels is excellent news for ITA Airways and Lufthansa and especially for all passengers flying to and from Italy. We look forward to welcoming ITA Airways and its outstanding employees as a new member of our airline family very soon. The decision is also a clear signal for strong air traffic in Europe, which can successfully assert itself in global competition.

Carsten Spohr, Chief Executive Officer of Deutsche Lufthansa AG

Ultimately, some consolidations are rejected because regulators may fear a negative impact on customers and competitors. However, if the case is strong enough, most will go through.

ITA Airways joining Lufthansa Group is a huge moment for the newly launched Italian airline, which emerged as a direct replacement for the now-collapsed Alitalia. There have been concerns about ITA’s long-term viability; however, with the support of Lufthansa Group, analysts have argued that it’s well-positioned for the future.

While the stake is valued at 41% and thus not a majority, executives at the Lufthansa Group have repeatedly stated their intent to increase it over time.

To move forward with full approval, Lufthansa would need to observe the progression of ITA Airways under its wing. Moreover, a significant focus must be placed on the Italian carrier’s finances before a further purchase becomes a majority stake.

ITA Airways will become the fifth network airline within the Group and retain its brand name. The multi-hub airline will leverage many synergies existing in the group to boost its worldwide status.