Italy’s government has officially authorized the privatization of ITA (Italia Transporto Aereo), the successor to Alitalia, setting the process in motion with the approval of a decree by the Council of Ministers to begin the search for buyers, according to Italy’s Finance Minister Daniele Franco.
The decision paves the way for German airline Lufthansa and Italian shipping group MSC to take control over the majority of the airline. However, there are other parties interested in taking over Alitalia’s successor. Financial circles said on Friday February 12th that the value of ITA Airways, at the moment, is estimated at up to €1.4 billion.
As Alitalia’s successor, ITA has significant rights to take-off and landing slots at Rome Fiumicino and Milan airports. Specifically, it inherited 43% of its predecessor’s slots at the Roman and Milanese facilities. According to Franco, the Italian government wants to keep a small stake initially, which could then be sold. “We will follow the usual procedures,” either a bidding process or an outright sale, as reported by German dpa and French AFP news agencies.
In late January, Lufthansa and MSC expressed interest in acquiring a majority stake in ITA Airways. At the time, it was concluded that the Italian government would retain a minority stake in the company, “which could be sold at a later stage.” MSC founder Gianluigi Aponte stressed that the shipping group wanted to hold a majority stake in the company, while Lufthansa could join as a business partner.
According to a recent report by Italian newspaper La Repubblica, US carrier Delta Airlines has joined the competition. The news about the Italian government’s decision establishes that all interested parties will be able to know Ita’s finances.
Ita Airways, successor to the also state-owned Alitalia, is currently 100% owned by the Italian state. The airline received a government injection of €700 million in 2021. More will follow this year and next, totaling €1.35 billion. 400 million euros should flow by the end of March.
In May 2017, the Italian government decided to take action regarding the future of Alitalia and appointed three extraordinary administrators, then granted a €600 million loan to keep it operational while its sale process began, either in one piece or parts of the business. At an early stage, several airlines then expressed interest such as Lufthansa, EasyJet and WizzAir, but it never materialized. In the case of the German airline, it flatly refused to allow the Italian state to remain as a shareholder through the public railroads Ferrovie dello Stato.
There were other interested parties subsequently, but throughout the process no investors for the airline materialized. Its financial situation was aggravated by the pandemic, which led the Italian government to reacquire it. It also received several grants from the Italian government, authorized by the European Commission.
Ita Airways was inaugurated last October 16th with a fleet of 52 aircraft, half of those operated by Alitalia, and a network of 44 destinations that will grow to 105 aircraft and 74 destinations by the end of 2025. The airline currently employs 2,300 people. This year, at least 1,000 more will be added, according to Ita’s management.
Already in November 2019, Lufthansa tried to invest €200 million in Alitalia. ITA Airways is currently a member of the SkyTeam alliance of airlines. If the take-over by Lufthansa does take place, ITA would most likely join StarAlliance.
