ITA Airways set to join Lufthansa Group, with Star Alliance shift expected
European regulators have approved Lufthansa Group’s bid to acquire a 41% stake in embattled Italian flag carrier ITA Airways, the company said Wednesday. The deal, expected to close later this year, will set the stage for ITA to become that latest to participate in the wave of consolidation in the European industry.
As part of the move, ITA is expected to join the Miles & More loyalty program, Lufthansa leaders said. And the company is “aiming” for the airline to become part of the Star Alliance.
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EU gives green light
The approval from the European Commission in Brussels came more than a year after the two companies first announced the deal, which will see Lufthansa acquire a 41% stake in ITA.
The deal gives Lufthansa Group the option to acquire the remaining 59% of ITA shares in the future. If the Lufthansa Group decides to move ahead on that front, it could come as soon as 2025, under the arrangement approved this week by European Union officials.
The merger is expected to be completed by the fourth quarter of this year, Lufthansa Group said in a statement announcing the news. At that point, the company is planning for ITA’s “swift integration” into the group, which already features a host of European airlines.
“We look forward to welcoming ITA Airways and its outstanding employees as a new member of our airline family very soon,” Lufthansa Group CEO Carsten Spoor said in a statement Wednesday.
ITA Airways was formed from the remnants of Alitalia in 2020, and the Italian government took over the beleaguered airline during the COVID-19 pandemic. To date, ITA has not been able to shake Alitalia’s longstanding reputation for losing money.
Same brand, new alliance and loyalty program expected
In joining Lufthansa Group, ITA Airways will remain the airline’s brand. That’s consistent with other mergers seen in the European airline industry.
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ITA will be the group’s sixth airline, joining Lufthansa, Eurowings, Swiss, Austrian Airlines and Brussels Airlines.
Immediately after the deal closes, Lufthansa Group said, ITA will begin codesharing with its newfound sister brands.
ITA will also join the Miles & More loyalty program used by other airlines in the group and join the combined booking and sales channels, not to mention “numerous synergies” the company can employ with aircraft and fuel purchasing decisions.
A key step that’s still to come: a shift in alliances. While the Lufthansa Group’s full-service airlines are part of the Star Alliance, ITA is part of SkyTeam today.
In announcing the news, Lufthansa Group said it’s aiming for ITA to join the Star Alliance in the “near future.”
That potentially could give Star Alliance loyalists more mileage earning and partner redemption opportunities on flights to Rome Fiumicino Leonardo da Vinci Airport (FCO), which will become Lufthansa Group’s southernmost hub, the company noted.
ITA’s footprint
ITA flies nonstop to just over a half-dozen U.S. cities from Rome. Its July 2024 U.S. route map, as shown in the below map from Cirium, includes Los Angeles International Airport (LAX) and San Francisco International Airport (SFO) on the West Coast, Chicago’s O’Hare International Airport (ORD) in the Midwest, and a host of East Coast airports: Boston Logan International Airport (BOS), New York’s John F. Kennedy International Airport (JFK), Washington’s Dulles International Airport (IAD) and Miami International Airport (MIA).
European airline consolidation
This ITA acquisition also marks the latest step in the wave of airline consolidation in Europe.
The continent today is home to three major parent companies.
Along with Lufthansa Group, International Airlines Group owns major carriers like British Airways, Iberia, Aer Lingus and low-cost Vueling, among others. (It’s worth noting that Finnair and Qatar Airways share Avios as a loyalty currency with several IAG brands, too.)
Air France-KLM Group, which owns its two namesake brands based respectively in Paris and Amsterdam, has reached a deal for a stake in Scandinavian Airlines. That still needs regulatory approval.
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