ITA Airways Poised To Become Part of Lufthansa Group

After months of tumbling around in the rumor mill, it has been confirmed that Lufthansa will take a minority stake in the Italian flag carrier ITA Airways.

The agreement between Deutsche Lufthansa AG and the Italian Ministry of Economy and Finance (MEF) is likely to close imminently.

“Today’s agreement will lead to a win-win situation for Italy, ITA Airways and Lufthansa Group,” said Carsten Spohr, Chief Executive Officer of Deutsche Lufthansa AG. “As a young company with a modern fleet, and with its efficient and expanding hub in Rome, ITA is a perfect fit for Lufthansa Group.”

Let’s delve into the details of what this means for passengers and the airlines themselves.

ITA To Merge With Lufthansa Group

The main change that will come from Lufthansa Group’s 41% minority stake in ITA Airways is that the carrier will join Austrian Airlines, Brussels Airlines, Lufthansa, and SWISS and become the fifth airline of the Lufthansa Group (excluding Lufthansa subsidiary, Eurowings).

This will mean that ITA will have to give up its status as a SkyTeam member airline to join its fellow Lufthansa Group airlines as a member of Star Alliance.

Once the deal is officially signed off, passengers should be able to benefit from the merger almost immediately.

Benefits include being able to book 1-ticket itineraries across each of the 5 airlines, now including ITA Airways.

Details concerning the elite status and miles of ITA Airways’ Volare program are yet to be released. We’d expect Lufthansa Group to make this a simple process for Volare members by incorporating it into its Miles & More program.

Given ITA Airways’ status as a quasi-start-up airline, joining an airline group giant like Lufthansa Group is a strong business move — especially given the miserable success rate of Italian flag carriers.

The cost to Lufthansa rings in at a cool €325 million (~$349 million) by way of capital increase. As part of the deal, Italy’s MEF will also chip into the pot with €250 million (~$268 million).

As this is an evolving story, we’ll update this piece with new information as and when we receive it.

Final Thoughts

ITA Airways joining the Lufthansa Group means big changes for the airline itself as well as the European airline industry in general.

Watch this space for more updates.