Lufthansa, the German airline, has expressed its intention to ease investors’ concerns about ITA Airways’ financial health on Friday. This move came after receiving EU approval to acquire a 41% stake in the Italian carrier. ITA Airways was established three years ago as a successor to Alitalia, which had been plagued with financial difficulties and had used up an estimated $10.8 billion of state funds in its final 14 years of operation.
Lufthansa has set a two-year timeline to evaluate ITA’s financial situation before considering a full acquisition. CEO Carsten Spohr expressed confidence on Friday in the economic viability of the acquisition. The approval process for Lufthansa’s purchase of a stake in ITA took over a year, with the company agreeing to certain concessions as part of the deal.
Spohr indicated that he anticipates cost improvements for ITA and downplayed concerns about the airline’s leasing debt. In an interview with Italian media on Thursday, Spohr mentioned that Lufthansa could potentially acquire a 90% stake in ITA by the following year. However, the details of the concessions made by Lufthansa as part of the approval process are still being examined.
