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Europe’s largest airline is about to get even bigger with ITA Airways purchase

Get ready for a blend of German efficiency and Italian flair in the skies... the European Commission has conditionally approved Lufthansa Group's plan to acquire 41 per cent of Italian flag carrier, ITA Airways.

Get ready for a blend of German efficiency and Italian flair in the skies… the European Commission has conditionally approved Lufthansa Group’s plan to acquire 41 per cent of Italian flag carrier, ITA Airways.

Pending further international approvals, the €325 million (around AU$520 million) purchase is expected to close by the end of 2024. The remaining shares will be available to Lufthansa, Europe’s largest airline group by revenue, from 2025 onwards.

Once the deal is done, ITA will benefit from Lufthansa’s extensive resources, including global sales, the Miles & More loyalty program and plane purchases. 

Lufthansa Group airlines
Lufthansa Group airlines.

The integration means ITA Airways will join Lufthansa Group as its fifth network airline while keeping its brand. 

With the move, Italy will become Lufthansa’s fifth home market and its second-largest revenue source after Germany and the USA.

The integration will also make Rome-Fiumicino Lufthansa’s sixth hub, boosting connections to South America, North Africa and the Middle East. 

In addition, new code-sharing arrangements will link the group’s route networks, creating over 1,000 new transfer options. 

In a market currently dominated by low-cost carriers, ITA’s new positioning is predicted to boost competition in Italy.  

The German company, the Italian Ministry of Economy and Finance (MEF) and ITA Airways have welcomed the green light, with Deutsche Lufthansa AG CEO Carsten Spohr saying the approval is “excellent news for ITA Airways and Lufthansa and especially for all passengers flying to and from Italy”.

ITA Airways
An ITA Airways plane.

“We look forward to welcoming ITA Airways and its outstanding employees as a new member of our airline family very soon,” he added.

“The decision is also a clear signal for strong air traffic in Europe, which can successfully assert itself in global competition.”

As part of the integration, ITA’s “Volare” loyalty program members will enjoy Miles & More benefits and mutual lounge access from day one.

Lufthansa says ITA will also look to join the Star Alliance soon.

“The acquisition of ITA Airways strengthens the internationalisation of the Lufthansa Group,” Spohr said. 

“We offer our guests a significantly greater choice of connections and destinations, and with the 5-star hub in Rome we are also extending our premium offering and better connecting strategic future markets south of the equator to our network.”

karryon-lufthansa-planes
Parked Lufthansa jets.

To help get the deal across the line, the European Commission (EC) and parties drew up several concessions including the transfer of slots at Milan-Linate Airport to a competitor and adding feeder flights from Rome to other European hubs. This is expected to enhance competition, especially on long-haul routes from Rome to North America.

“Despite the comprehensive and far-reaching concessions, the investment in ITA Airways strengthens the Lufthansa Group’s position in global competition,” Spohr remarked. 

“We will make ITA Airways a strong and successful part of our company and thus secure its future as an international airline and strong brand. ITA Airways will support us in further expanding our position as number one in Europe.”

Alitalia ceased operating during the COVID-19 pandemic.
Alitalia ceased operating during the pandemic.

ITA Airways rose from the ashes of Italy’s previous national airline, Alitalia, which ceased operating during the COVID-19 pandemic.

Operational since October 2021, Rome-based ITA carried nearly 15 million passengers last year with its fleet of 96 Airbus aircraft. ITA currently serves 69 destinations.

In June, Lufthansa announced it would add an Environmental Cost Surcharge on all tickets sold to and from the UK and 29 European countries from 26 June 2024 for departures from 1 January 2025 to offset the rising price of eco regulations and increase sustainable air travel.