Ita Airways Lufthansa, this is how the new company will be - Breaking Latest News
MILAN. Integration, timing of the expected return to profit, route and fleet plans, appointments and competition. These… Ita Airways Lufthansa, the German carrier born from the ashes of the old Alitalia, has announced the acquisition of 325 million euros with a capital increase of a 41% stake in Ita Airways with the option to go up to 100% of the capital. CEO Carsten Spohr opened the conference with analysts and journalists, emphasizing the importance of competitive cost base, and the goal of taking control of ITA only when the business has become profitable. The purchase will depend on the performance it will be able to achieve, with the airline being restructured and structurally cost-competitive. The agreement with Ferrovie allows ITA to increase the fleet from 66 to 94 aircraft, while the EU is expected to green the light from the operation.
Published : 2 days ago by admin in Business Travel
MILAN. Integration, timing of the expected return to profit, route and fleet plans, appointments and competition. These are just some of the details of the acquisition plan of Ita Airways by the Lufthansa group that were presented this morning by Carsten Spohr, CEO of the German carrier, during the conference call on the entry announced yesterday in the company born from the ashes of the old Alitalia .
Yesterday Lufthansa had announced the acquisition for 325 million euros with a capital increase of a 41% stake in Ita Airways with the option to go up to 100% of the capital.
“Ita is not Alitalia, it has new rules that guide it in the right direction: at the time we didn’t invest in Alitalia because we didn’t think it was interesting for our shareholders, but today we are convinced that it will create value for everyone” with this sentence Spohr opened the conference with analysts and journalists. Thanks also to «a competitive cost base, at Lufthansa we are confident that Ita will become profitable. It won’t be an overnight change, some changes will take longer, but it will happen soon. We believe that Ita will return to profit in 2025». Spohr underlined how “yesterday was an important day for Lufthansa: we took an important step to better position our group at a European and global level, a move that will help us to be more international and less dependent on our national market”.
The CEO explained that his goal is to take over Ita Airways entirely, but that Lufthansa cannot be forced to do so. Carsten Spohr, added that the German group must ensure that it does not overpay for the Italian carrier. In practice, the 100% option will be exercised only if the business is profitable.
The CEO has repeatedly emphasized the elements that prompted Lufthansa to break the delay: «Our decision was guided by an assessment of the risk that we assumed with this investment: but Ita today has sufficient liquidity and will receive the necessary funds to implement development plans and support the business». “However, we will not consolidate the results of ITA” in the Lufthansa balance sheet, adds Spohr: “We are not forced into a full acquisition and will take control of ITA only when the business has become profitable”.
The purchase of 100% of the company will depend on the performance it will be able to achieve. “We are confident that ITA will be profitable in 2025,” Spohr said on the conference call. «In combination with the Lufthansa Group, ITA can realize its full potential by benefiting from the size and synergies of a global group. ITA Airways is a perfect addition to the Lufthansa Group airline portfolio.” The airline is “restructured and structurally cost-competitive” with a “solid plan to make the Italian carrier profitable,” the manager said today.
“Develop Rome Fiumicino as a profitable hub and take advantage of Ita Airways’ consolidated position at Linate”. These are the strategies explained by the CEO of the Lufthansa group in the details of the agreement for the entry of the Germans into Ita Airways. «Lufthansa aims to ensure that the Ita network is complementary to the existing one of the German group; improve short-haul profitability by optimizing the network and expanding intermodality,” he concluded.
On the operational front, Spohr observes how it will be possible – for short-haul feeding – to shift that will allow “passengers to depart from Zurich or Frankfurt instead of from Paris or Amsterdam”. As for Milan, the manager said that the airport has great prospects “both as a leisure and business destination”. All without counting that “the agreement with Ferrovie dello Stato allows us to transfer passengers to the high-speed train network”.
“By 2027, ITA’s fleet will increase from 66 to 94 aircraft: it will be a homogeneous fleet, complementary to that of the Lufthansa group, it will be entirely made up of Airbus aircraft, which will allow us to have efficiency in operational terms” said Spohr in conference call adding that if today the Ita fleet “is all leased, the goal is to gradually increase the share of owned vehicles”.
The crux of the EU judgment
“I’m sure the EU will appreciate the operation” said the manager on the expected green light from the EU Commission to the operation which should also take into account Ryanair, the biggest competitor in the Italian market which “is abolishing competition in Italy ».
“Ita is only the fourth largest company on the Italian market, where Ryanair has a dominant share. In Europe, Ita has the lowest share among national operators» Spohr stressed during the conference call, saying he is convinced that there is room to quickly close» the acquisition of the minority share, without major objections from the European Commission. In Brussels, he underlines, they will understand that “with the strengthening of Ita there will finally be real competition on the Italian market”.
Even if the Mef “remains on board” for the management of the Ita Airways plan, “the operational responsibility of it will rest with the board” in which Lufthansa, which will appoint the managing director, will be able to count on another member, Spohr said in a conference call , explaining that “the closing of the transaction between Lufthansa and the MEF for the sale of a minority stake in Ita is expected by the end of this year”. The German CEO underlines how “the strong restructuring” implemented after the “disappearance” of Alitalia “has made Ita a competitive company of the right size”.
Regarding the timing of the appointments, the manager did not provide details or indicate possible names.
Topics: Aviation, Airlines, Lufthansa