Lufthansa Group is on the verge of completing its long-anticipated acquisition of ITA Airways, with the deal expected to close on January 13, 2025. This significant move will not only strengthen Lufthansa’s foothold in the European aviation market but also reshape competition dynamics, as ITA Airways joins the German carrier’s expanding network of European airlines.
Key Acquisition Details
Lufthansa plans to acquire an initial 41% stake in ITA Airways for €325 million, with the option to purchase the remaining shares at a later stage. The acquisition is viewed as a strategic move to enhance ITA’s profitability while allowing Lufthansa to strengthen its position in critical markets.
The Italian Ministry of Economy and Finance (MEF) and Lufthansa recently agreed on a $338 million capital increase, with the German carrier given until January 15, 2025, to subscribe to this investment. This agreement also introduces revised company bylaws outlining shared management rights between Lufthansa and the MEF, ensuring a structured governance model.
European Commission Approval and Remedies
Final regulatory hurdles were cleared after the European Commission (EC) approved the acquisition, contingent on several competitive remedies aimed at maintaining market balance. EasyJet, Air France-KLM, and International Airlines Group (IAG) were designated as remedy takers, with assets and slots at Milan Linate Airport transferred to ensure continued competition. These measures enable EasyJet to expand with new bases at Linate and Rome Fiumicino, while Air France-KLM and IAG will enhance transatlantic service from Italy, preventing Lufthansa from holding a disproportionate market share in the region.
This regulatory clearance not only ensures fair competition but also resolves tensions between Brussels and Rome, as Italian officials, including Prime Minister Giorgia Meloni, had previously criticized the EC for delaying the deal.
ITA Airways’ Expanded Role Within Lufthansa Group
Upon completion, ITA Airways will become part of Lufthansa’s growing network of European carriers, which already includes Austrian Airlines, Brussels Airlines, Swiss International Airlines, and Lufthansa itself. Other associated brands like Eurowings, Discover Airlines, and Edelweiss also form part of the group’s extensive portfolio.
The integration plan for ITA Airways includes:
- Increased US Connectivity: ITA plans to serve up to six US destinations during the summer season.
- Enhanced Hub Operations: Lufthansa aims to expand ITA’s Rome Fiumicino hub as a key transit point, particularly for Eastern Europe and US-bound flights.
- Strategic Expansion: Increased services to Africa and South America, including potential flights to Bogotá and expanded seasonal operations to Brazil.
Broader Industry Implications
Lufthansa’s acquisition of ITA Airways mirrors the group’s historical strategy of acquiring and revitalizing struggling airlines. Previous successes with Brussels Airlines and Swiss International demonstrate Lufthansa’s capacity for effective airline turnarounds.
However, anti-competition concerns remain central to the debate, particularly given Lufthansa’s dominant European market position. Critics argue that such dominance could lead to reduced consumer choice and fare increases, despite Lufthansa’s cooperation with regulators. The group’s efforts, such as slot transfers and operational adjustments at Milan Linate, aim to balance expansion with fair market practices. Aviation analyst John Doe noted, ‘While Lufthansa’s steps are commendable, long-term monitoring will be essential to ensure competitive balance.’
Looking Ahead
The ITA Airways acquisition signals Lufthansa’s continued dominance in European aviation. Beyond financial gains, the deal is expected to strengthen Italy’s aviation infrastructure, boost connectivity, and potentially elevate ITA Airways’ long-term performance. However, this consolidation could also pose challenges for smaller competitors striving to maintain market share against Lufthansa’s expanding influence.
As the deal progresses, Lufthansa is also rumored to be eyeing a stake in TAP Air Portugal, reflecting its broader strategy of expanding its influence across the continent. The full integration of ITA Airways is anticipated to take up to two years, with gradual alignment in operations, network strategies, and market positioning.
[…] months of anticipation and regulatory hurdles, the Lufthansa Group has officially signed the deal to acquire a meaningful stake in ITA Airways, marking a […]