Lufthansa Group will be able to increase its ownership in Italy's state-owned ITA Airways (AZ, Rome Fiumicino) to 90% from early 2025, but it wants to keep the Italian government's support for the first two years following the merger scheduled for the fourth quarter of 2024, Group CEO Carsten Spohr told the Italian newspaper Corriere della Sera.

"For us, the option for the 90% starts in early 2025, but I would like to ask the Italian government to stay on board for a little longer because I saw how important the support of the Italian government was also in Brussels and I would like this support also in the first two years of our role in ITA. Then we will agree together on what to do," he said in an interview.

When the Lufthansa parent agreed on the minority share last year, it indicated its intention to eventually gain complete control of ITA Airways.

ch-aviation has contacted Lufthansa Group for comment. In a statement earlier, the German airline group confirmed that "options for the acquisition of the remaining shares in ITA Airways have been agreed between Lufthansa Group and the Italian Ministry of Economy and Finance (MEF) and can be exercised from 2025 at the earliest".

Spohr was speaking following the European Commission's announcement on July 3 that it had approved Lufthansa Group's bid to acquire 41% of ITA Airways for EUR325 million euros (USD351.7 million), pending the implementation of certain measures to address fair competition concerns about the merger in the European, Italian, and North Atlantic markets.

According to Spohr, the next steps involve implementing the required corrective measures stipulated by the EU. "It will take a few more weeks to implement the corrective measures. The closing is expected in the fourth quarter of this year. We are ready to start immediately, from the first day after the completion of the agreement, so as to begin the integration, which should last a couple of years".

Key concessions to allay antitrust concerns include the transfer of slots at Milan Linate to a short-haul traffic competitor, which will take over specific routes between Italy and Lufthansa Group's existing home markets. Additional feeder flights from Rome to the hubs of European competitors will also ensure improved competition on long-haul routes from Rome to North America.

"In the first year, we will harmonise the flights and fares for ITA and Lufthansa," Spohr explained. "We will focus on codeshares between the Italian carrier and our group; we will integrate our customer data; we will make the sales offices we have around the world available to ITA; we will optimise the management of ground services in various countries, and VIP lounges," he added.

"In 2026-2027, it will be the turn of ITA to enter Star Alliance and the joint ventures we have with partners. We will work on optimising the fleet and lease contracts, joint purchasing, and digital infrastructure."

Spohr said the most significant challenge would be to turn around ITA Airways, the successor to bankrupt Alitalia, which despite being the relatively new kid on the block, has struggled to reach profitability. The goal is to achieve a substantial profit margin to guarantee a return on investment, and Lufthansa aims to expedite the integration of ITA, using past experiences with other group carriers like Swiss, Austrian Airlines, and Brussels Airlines. "The boom in air transport in Italy could help us; I'm optimistic," he said.

Regarding potential political intervention, Spohr said Lufthansa felt supported by the current Italian government. "I can only judge from interactions with the current government, which has always supported us. We feel responsible towards Italy and its economy, which is why we want to do well."

While ITA Airways starts from a lossmaking position, Spohr believes the Italian carrier could achieve the group's 8% profit margin target, which would align it with the group's standards.

He sees overcoming the dominance of low-cost carriers in Italy as a gradual process, achievable within two years with Lufthansa's support and operational machinery. ITA will offer premium services domestically and internationally, leveraging Rome's strategic location for connections to Latin America, Africa, and the USA.

Rome's Fiumicino Airport will become Lufthansa's sixth hub. Spohr believes it will complement rather than conflict with its existing hubs.

Despite lengthy EU antitrust scrutiny, Lufthansa appreciates the professional dialogue and believes in the strategic benefits of the ITA acquisition. "The dossier took longer than necessary, even in terms of documents; we sent 460,000 pages. But I recognise that it was a highly professional dialogue. It took time to understand how the competition works," he said.

Spohr declined to name ITA Airways' new CEO after Italian press reports suggested Joerg Eberhart, Lufthansa's head of strategy and former boss of Air Dolomiti (EN, Verona), would get the job.