“The first step is to acquire a minority share and to agree on options for the purchase of the remaining shares at a later date,” the German company said in a press release, after months of negotiations in slides with Rome.

The group did not specify the targeted stake in the Italian public company, born in 2021 from the ashes of Alitalia, which the government has been trying to sell for a year.

According to the Italian press, Lufthansa covets a 40% share, valued at around 300 million euros.

"Subject to the signing of the Memorandum of Understanding by both parties, further negotiations and discussions would be conducted on an exclusive basis," the statement said.

Shortly before, the competitor Air France-KLM, member of a consortium retained by the previous Italian government for the privatization of ITA, had announced not to apply, leaving Lufthansa alone on the track.

The German group could thus follow the path already taken for its rise in the capital of Brussels Airlines, acquired in two stages, in 2009 and 2016. Lufthansa also owns the companies Swiss and Austrian.

The Italian Ministry of the Economy confirmed in the evening in a brief press release that it had received only one offer, that of Lufthansa.

The ITA airline plane taking off from Rome Fiumicino airport on November 3, 2022 © Andreas SOLARO / AFP/Archives

The government “reserves the right to examine it” in the light of the decree published at the beginning of January on the privatization of ITA Airways which notably asks the future buyer for guarantees on employment and the development of the international network.

Company to straighten out

A sale of ITA Airways, if it materializes, would put an end to a long period of uncertainty marked by upheavals and tensions within the company which took off in October 2021 and remains in search of profitability.

It would be a breath of fresh air for the Italian state, because over the years, it has had to spend more than 13 billion euros to try to resuscitate the national company.

Upon acquisition of a minority stake in ITA, Lufthansa should take control of Alitalia's successor, even if the Italian State would retain a right of scrutiny over strategic decisions.

The best solution would ultimately be a "complete" takeover of ITA by Lufthansa to avoid any risk of interference from the Italian state, Andreas Jahnke, expert at Accenture, told AFP.

Lufthansa CEO Carsten Spohr has long had his eye on the Italian market, "the most important" for the group "apart from its domestic markets and the United States", according to the press release.

The announcement was well received on the Frankfurt Stock Exchange, where Lufthansa shares closed up 5.17% to 9.26 euros.

The offer of the first European air transport group comes after two failed attempts by Lufthansa to enter the capital of Alitalia, in 2009 and 2019.

european giant

Rome gave the green light in February to the privatization of ITA Airways, 100% controlled by the state.

The former government of Mario Draghi had selected at the end of August the competing offer of the American investment fund Certares, associated with Air France-KLM and Delta Air Lines, with a view to the opening of exclusive negotiations.

Faced with the lack of progress in the discussions, Economy Minister Giancarlo Giorgetti announced in October his decision not to renew the exclusivity period, thus putting Lufthansa back on track.

An entry into the capital by Air France-KLM could not have exceeded 10%, because the company has its hands tied due to the conditions imposed by Brussels in return for the public aid received to overcome the Covid-19 crisis.

In the absence of a partner, ITA had little chance of survival in the face of very tough competition from low-cost airlines.

"There is no other way for ITA than integration into a large group," commented on Twitter Andrea Giuricin, transport economist at Bicocca University in Milan.

© 2023 AFP