Italy, Lufthansa Sign LOI for 40% Stake of ITA Airways
Italy’s Ministry of Economy and Finance (MEF) has signed a letter of intent with Lufthansa over the sale of a 40% stake in the state-owned airline ITA Airways, the loss-making successor of Alitalia.
“The plan is to agree on the initial acquisition of a minority stake as well as on options to purchase the remaining shares at a later date. For Lufthansa Group, Italy is the most important market outside of its home markets and the US. Italy’s importance for both business and private travel lies in its strong export-oriented economy and status as one of the EU’s top vacation spots,” says Lufthansa.
Last week, the German carrier offered to buy a minority stake in ITA Airways. While details on the offer were not disclosed, sources close to the matter told Reuters that Lufthansa was aiming for a 40% stake of ITA, valued at between €200 million and €300 million (US$217 million to US$326 million). On Friday, Lufthansa confirmed it had signed the letter of intent with MEF and ITA Airways. "The parties will now start negotiations on the structure of a possible participation," reads the statement.
ITA Airways’ new administration in Rome passed a decree in December 2022 to initially sell a minority stake through capital increases to speed up a full divestment. Under the terms of the bidding process, Lufthansa has to ensure it will develop Italy's main hubs and guarantee ITA has access to strategic markets as well as increases its long-haul routes, reported Reuters.
The German company, which already operates the brands Swiss, Austrian Airlines and Brussels Airlines, has a strong footprint in Latin America and Mexico, connecting travelers from the EU to the region. “Latin America is one of the most important regions for Lufthansa Group and we work with local authorities and boards to promote our new routes,” says Alejandro Arias, General Manager Mexico and Central America, Lufthansa. The German carrier offers over 500 weekly flights from the Americas to Frankfurt, Munich, Zurich, Vienna and Brussels, its four main hubs in the EU, he adds.
Lufthansa has played an important role in boosting the relationship between Germany and Mexico, says Arias. The German carrier flies thrice per week from Mexico City to Vienna and Turin. In addition, it offers 50 weekly flights to Cancun.