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Lufthansa CEO optimistic about ITA Airways’ financial health By Reuters
By Joanna Plucinska and Klaus Lauer
LONDON (Reuters) – Lufthansa sought to reassure investors about the financial health of ITA on Friday after the German carrier won EU approval this week to buy 41% of the Italian airline, which remains in the shadow of its predecessor Alitalia.
ITA Airways took off in 2021 and has since been trying to shake off the troubled legacy of Alitalia, which has burned through some 10 billion euros ($10.8 billion) of state funds over the past 14 years.
Once a symbol of glamour and style for Italy and a beacon of national identity, the government accepted that ITA, the new Alitalia configuration, needed strong ownership to survive.
As part of the deal, Lufthansa will give itself two years to assess ITA’s financial health before pushing for a full takeover, in a strategy similar to its acquisitions of Swiss Airlines and Brussels Airlines.
“We only need to execute if it is economically viable, although you can hear my optimism and the optimism of the entire group that this will be the case,” CEO Carsten Spohr said on a conference call with investors and analysts.
The German airline group took more than a year to win approval from the European Commission for its purchase of a stake in the Italian carrier, eventually agreeing to a series of concessions whose details are still being worked out.
Spohr said he expected ITA’s commercial costs to improve further given the efficiency of Rome’s Fiumicino Airport, and that the airline’s lease debt was not a major concern.
On Thursday, Spohr told Italian media that Lufthansa could acquire a 90% stake in ITA as early as next year.
Lufthansa has faced its own financial difficulties, recently reporting a profit warning ahead of first-quarter earnings due to higher-than-expected strike costs. It has also received financial aid from the German government during the pandemic.
Alitalia has faced potential takeovers from several suitors, including Air France-KLM, that have not materialized, and the carrier has been bailed out repeatedly over the decades.
($1 = 0.9239 euros)