Lufthansa Expands European Reach with ITA Airways Acquisition
Lufthansa Group has made a meaningful move in teh European aviation landscape with the acquisition of ITA Airways, marking the largest purchase in the company’s history. this strategic acquisition brings a new sister airline into the Lufthansa fold, possibly signaling further consolidation within the European airline industry.
“We have too many airlines in Europe,” stated Lufthansa CEO Carsten Spohr during a press conference in Rome, highlighting the ongoing trend of consolidation. Spohr specifically mentioned TAP Portugal as a potential target for future acquisitions,noting that the airline is also undergoing privatization.
While Lufthansa aims for full ownership of ITA Airways, the next major step is not expected this year. Spohr emphasized that the acquisition is not merely a financial transaction but also a commitment to ITA Airways’ employees, customers, and the Italian economy. He expressed confidence that ITA Airways will achieve profitability in 2023 and reach an operational return on investment of eight percent in the long term, aligning with the target for the entire Lufthansa Group, which includes Austrian Airlines, Swiss International air Lines, and Brussels Airlines.
ITA Airways, the successor to the former Alitalia, transported 18 million passengers with a fleet of 90 aircraft in 2022, a 20% increase from the previous year. Customers of both ITA Airways and Lufthansa Group are expected to benefit from the integration, with immediate advantages such as the linking of the Miles & More and Volare loyalty programs and access to each other’s airport lounges starting in late March.
the integration process is expected to be completed within 18 months, with plans for an expansion of ITA Airways’ fleet, focusing on long-haul routes, beginning in 2026. This expansion could lead to an increase in the workforce of approximately 5,000 employees, potentially offering job opportunities to former Alitalia employees.
Lufthansa CEO Spohr acknowledged that ITA Airways’ current market share on transatlantic routes is relatively low at 12 percent. However, this segment remains separate from Lufthansa due to ongoing regulatory approvals from the US competition authority.
Despite the anticipated synergies, Spohr stated that lower ticket prices are not expected in the near future. He cited rising costs associated with enduring aviation fuel, regulatory expenses, and airport infrastructure as factors contributing to potential price increases.Despite these challenges, Spohr expressed optimism about the future of aviation, stating, “I think it will be a very good year for aviation.”
Lufthansa Takes Off: Expert Weighs in on ITA Airways Acquisition
Time.news Editor: With the recent acquisition of ITA Airways, Lufthansa has made a meaningful move in the European aviation landscape. Can you shed some light on the implications of this deal,notably for both lufthansa and the broader industry?
Aviation Expert: Absolutely. This deal signifies a clear trend within the industry: consolidation. As Lufthansa CEO Carsten Spohr stated, “We have too many airlines in Europe.”
This acquisition not only strengthens Lufthansa’s position in Europe but also sets a precedent for further mergers and acquisitions.
Time.news Editor: We’ve seen Lufthansa eyeing TAP Portugal as a potential target as well. How realistic is the prospect of further consolidation, and what factors might drive it?
Aviation Expert: The possibility of more airline mergers is very real. Factors like increasing fuel costs, fierce competition, and pressure to achieve greater profitability are pushing airlines to seek larger scale and efficiencies. Acquiring another airline allows them to leverage their combined resources, networks, and negotiating power.
Time.news Editor: Lufthansa has expressed a desire for full ownership of ITA Airways. What are the key milestones in this process, and what are the major challenges Lufthansa might face?
Aviation Expert: The next major step is exercising the option to acquire the remaining shares in 2025 at the earliest, according to [[3]]. Challenges could arise from integrating two distinct cultures,aligning operational systems,and navigating the complex regulatory environment.
Time.news Editor: What are the immediate benefits for customers of both lufthansa and ITA Airways?
Aviation Expert: Customers can expect immediate advantages like a joint loyalty program linking Miles & More and Volare, improved access to airport lounges, and perhaps expanded route options as the integration progresses.
Time.news Editor: Looking ahead, what role will ITA Airways play in Lufthansa’s global strategy, especially concerning long-haul routes?
Aviation Expert: Lufthansa has aspiring plans to expand ITA Airways’ fleet and focus on long-haul routes, beginning in 2026. This expansion could substantially boost Lufthansa’s presence in key markets and attract a wider range of passengers. [[2]]
Time.news Editor: Despite these synergies, Lufthansa has stated that it doesn’t expect lower ticket prices in the near future. Why is that the case?
Aviation Expert: The current environment is marked by surging costs for aviation fuel,regulatory compliance,and airport infrastructure. These pressures counteract the potential cost savings from the merger, making it arduous to lower ticket prices promptly.
Thanks for joining us today. your insights on Lufthansa’s acquisition of ITA Airways are valuable for our readers seeking to understand the complexities of this significant growth in the aviation industry.
