Despite passing the deadline previously set on April 24, 2023, Lufthansa, ITA Airways, and the Italian Government have continued their negotiations, with reports indicating that the German airline group would fully take over the Italian carrier by mid-2020s.
With talks between the three parties continuing, a new deadline was set for May 12, 2023, according to a report by Corriere della Sera. However, sources indicate that the deal might be concluded before the May deadline, as the negotiations are focused on the last and “non-essential” details.
Preliminary plans point out that Lufthansa would acquire an initial 40% stake in ITA Airways for a price of between €200 and €250 million ($220.6 million and $275.7 million), fully acquiring the Italian airline by H2 2025 or H1 2026. However, that will depend on the Italian carrier breaking even, which would trigger a contractual close for Lufthansa to acquire the remaining 60%.
The flag carrier of Italy ended 2022 with a net loss of €486 million ($536 million), despite revenues surging to over €1.5 billion ($1.6 billion), as ITA Airways’ management pointed out that the losses are consistent “with the ‘start-up’ phase of the company”.
The airline also pointed out a difficult market to operate in 2022, as the COVID-19 pandemic in the first half of the year gave way to the invasion of Ukraine by Russia in February 2024, resulting in rising fuel prices as well as a deteriorating euro/dollar exchange rate.
Lufthansa officially submitted its bid for ITA Airways on January 18, 2023, stating that the talks between the three sides “would primarily focus on the form of a possible equity investment, the commercial and operational integration of ITA into the Lufthansa Airline Group, as well as resulting synergies.”
“For Lufthansa Group, Italy is the most important market outside of its home markets and the US,” the German airline’s announcement continued.
On March 30, 2023, ITA Airways announced that the joint business plan with Lufthansa was approved by the company’s shareholders.