Deutsche Lufthansa is apparently in advanced talks about a possible merger with the Italian airline ITA, the successor to the insolvent Alitalia.

The Italian newspaper "Il Foglio" reported at the weekend that it was about buying a 40 percent stake in ITA.

Lufthansa declined to comment.

An ITA spokesman told Bloomberg news agency no steps would be taken on possible alliances before a strategic plan is presented to the company's board on Jan. 31.

Timo Kotowski

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Tobias Piller

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It was said in industry circles that such a transaction was not imminent;

the newspaper had written of a possible announcement in the coming week.

However, Lufthansa is very interested in a commercial partnership.

Talks about this could soon lead to results, but this does not have to lead directly to an equity investment.

After the German part of the Corona aid package had been repaid, Lufthansa was now subject to the condition that the group was not allowed to push ahead with any takeovers. In corporate circles, the phrase is now circulating that the “right home” for a new Italian airline is somewhere close to Lufthansa. But even with today's subsidiaries in Austria, Switzerland and Belgium, one only got involved after their economic turnaround. In the past, Lufthansa had repeatedly rejected advertising from Italy to join Alitalia. However, it was always said that with a view to a "New Alitalia" freed from legacy issues, the situation could be different.

In fact, the attractiveness of a possible investment in Italy and thus also the chances of getting started have improved significantly since last year. Because the old Alitalia, artificially maintained by the state, was wound up and ITA was founded as a new company, many of Alitalia's vested interests were abolished. By then, ten unions were fighting to ensure that the many jobs and workers' privileges were preserved, whatever the cost. Last year it became apparent that the Italian government would not allow itself to be blackmailed into promising to preserve the old Alitalia. Before the Corona crisis, Alitalia had 11,000 employees, most recently 6,000. However, the European competition regulators, the government and the new ITA leadership had pushed throughthat only 2000 people are employed in the new line. Unions' dreams of an airline with more than 100 aircraft were buried, ITA took off with 50 aircraft.

With fewer employees, less union influence and salaries well below Lufthansa levels, the company, whose administration and old Byzantine methods of purchasing were curtailed, is now becoming interesting for Lufthansa.

Italy is not only an important travel destination.

Many managers also come from there, who are brought to the expensive Lufthansa intercontinental flights from Frankfurt and Munich with feeders.

Most recently, Ryanair and Easyjet were the market leaders for international flights to and from Italy, followed by the IAG Group with British Airways and Iberia, ahead of the Lufthansa Group with a 9 percent market share.

The German group is therefore fundamentally interested in increasing its stake in Italy, as long as this is not associated with losses and political blackmail.