ITA Airways Reports Losses, Lufthansa Closes in
ITA Airways suffered a yearly loss of nearly half a billion euros, according to the airline's most recent financial report. Is this good for Lufthansa?
ITA Airways suffered a yearly loss of nearly half a billion euros, according to the airline's most recent financial report. Is this good for Lufthansa?
DALLAS — In 2022, the state-run Italian flag carrier ITA Airways (AZ) recorded a loss of almost half a billion Euros in its first financial year as per the airline's latest financial report. Meanwhile, Lufthansa (LH) shows stronger interest in AZ, moving forward with negotiations.
ITA carried out around 97,000 flights in its first financial year 2022, transporting around 10 million people. The financial report shows that although the airline had a turnover of €1,576bn, it still incurred a loss of €486bn.
The successor of Alitalia reported a profit of fewer than €338m before interest, taxes, depreciation, and amortization (EBITDA). AZ blames the pandemic, the rising jet fuel price due to the war in Ukraine, and the poor euro-dollar exchange rate for the yearly loss.
Lufthansa has been negotiating a stake in the Italian airline with the Ministry of Economic Affairs and Finance for months. The German carrier's CEO Carsten Spohr, the only interested party in AZ, wants to buy 40% of its share for €200m.
However, further shares may be purchased as the price has significantly fallen after the disclosure of the AZ year-end report. LH and AZ signed a letter of intent at the end of January.
There is not much time left. On April 24, the deadline for the exclusive negotiations between LH and AZ expires. Carsten Spohr confirmed to journalists in Brussels today that he would fly to Rome tomorrow March 30 to meet with the Italian Minister of Economic Affairs.
Despite the negative numbers from the Italian airline, Spohr is still convinced that AZ can be profitable as part of the Lufthansa Group. Rome (FCO) and Milan would serve as important hubs for the potential new subsidiary airline.
Milan is the third largest location after London and Paris in terms of passenger numbers. The city has two airports, Malpensa (MXP) and Linate (LIN).
If the LH deal goes ahead, a change of AZ from Skyteam to Star Alliance would also be imminent, and while LH already has the Airbus A220 in the Group, it could add more.
If a deal is inked, how will LH make AZ profitable again? Be sure to leave your comments on our social media channels.
Featured image: EI-IFE ITA Airways Airbus A350-941 A359 JFK KJFK. 48 / 25,000. Photo: Francesco Cecchetti/Airways
https://airwaysmag.com/lufthansa-signs-letter-of-intent-for-ita-purchase/
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