Beleaguered Italian flag carrier ITA Airways has found a new owner.
The Lufthansa Group said Thursday that it had agreed with the Italian government to purchase a 41% stake in the state-owned airline, with options to acquire the remaining 59% at some point in the future.
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The 325-million-euro (about $348 million) purchase will see the Italian government make an additional 250-million-euro cash investment in the airline.
ITA Airways was formed in 2020 from the remnants of Alitalia, which the Italian government took over in March of 2020 after years of unsuccessful attempts to find a buyer. During the COVID-19 pandemic, the government chose to nationalize and restructure the airline, which was notorious for losing money.
ITA began flying in October 2021. The airline reported a loss of around 486 million euros ($527 million) in 2022 — its first full year of operations — despite earning revenues of 1.58 billion euros from roughly 10.1 million passengers carried.
Lufthansa — which owns a variety of European airlines, including Swiss, Eurowings, Austrian Airlines and Brussels Airlines — placed a bid for ITA earlier this year to try and gain more market share in Italy. The Germany-based consortium previously struggled to build a foothold in Italy, squeezed out by competition from Alitalia (or ITA) and its SkyTeam partners, along with low-cost carriers like EasyJet and Ryanair.
“As part of the Lufthansa Group family, ITA can develop into a sustainable and profitable airline, connecting Italy with Europe and the world,” Lufthansa CEO Carsten Spohr said in a statement. “At the same time, this investment will enable us to continue our growth in one of our most important markets.”
The agreement, which will need to be approved by the European Union, will see Lufthansa assume control over ITA’s operations even with the initial minority ownership stake.
“Upon closing of this transaction, ITA Airways and Lufthansa Group are expected to immediately start their cooperation at a commercial and operational level,” the German group said in its announcement. “As a network airline, ITA will closely cooperate with Lufthansa Group to benefit from group synergies.”
What this means for frequent flyers and points and miles collectors remains unclear. Lufthansa is a member of Star Alliance, while ITA, like Alitalia before it, is part of SkyTeam. It is not clear if or when ITA would leave SkyTeam, join Star Alliance, or otherwise integrate with Lufthansa’s Miles & More frequent flyer program.