MSC Group, partner of Lufthansa in the offer for ITA Airways in Italy | Economic news
By COLLEEN BARRY, AP Business Writer
MILAN (AP) — MSC Cruises’ parent group is joining forces with Lufthansa in a bid for a majority stake in Italy’s ITA Airways, the company created from the ashes of former flagship Italian airline Alitalia .
MSC Group, which includes container shipping and logistics businesses in addition to cruises, said in a statement on Monday evening that the deal would leverage synergies for both passengers and cargo, and that Lufthansa had already expressed interest in the agreement.
The companies have asked the Italian government, which currently controls ITA Airways, to grant a 90-day period for exclusive interviews and due diligence. Lufthansa said it would use the 90-day period to “explore all possible options for cooperation, including possible capital investment”.
ITA Airways Chairman Alfredo Altavilla welcomed the expression of interest, telling German financial daily Handelsblatt that it demonstrated “strategic competence”.
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“Let’s hope that the conditions are maintained until the end of this adventure,” he said.
Altavilla also said it also sees synergies with freight, which is one of the most profitable parts of the business.
ITA Airways was looking for an industrial partner, and a successful conclusion of the MSC-Lufthansa deal could secure the future of the airline successor to the long-struggling Alitalia.
ITA, or Italy Air Transport, was officially launched last October after bankrupt flag carrier Alitalia landed its last flight, ending a 74-year-old commercial history with a series of inglorious commercial deals that didn’t were never able to restore the Carrier’s health.
At one point, former Prime Minister Silvio Berlusconi rejected KLM-Air France’s offer to buy Alitalia, citing its importance as a strategic asset, to hand it over to a group of reluctant Italian investors, who eventually sold a 49% share to Abu Dhabi Etihad in 2014. In 2017, Alitalia was in its second bankruptcy in a decade.
Airline analyst Gregory Alegi said the MSC-Lufthansa deal could secure ITA Airways’ future after long years of turmoil.
“Lufthansa looks like a solid airline-centric company,” Alegi said. “It has been running airlines for almost 100 years, it is a very efficient and well-run business, and there is every indication that it would operate on an industrial, not a political, basis. If that holds, that would be the end of the saga.”
He added that the MSC partnership “appears to touch on a business model geared towards leisure traffic”.
Already, Lufthansa operates Air Dolomiti in northern Italy, which routes long-distance traffic from airports such as Malpensa in Milan, Valerio Catullo in Verona and Marco Polo in Venice to connections in Munich and Frankfurt.
The ITA has 52 planes which it says will grow to 105 and is moving towards next-generation planes that use sustainable alternative fuel sources.
The company started with 2,800 employees – 70% of them from Alitalia – and said it plans to increase the size of its workforce to 5,750 by 2025.
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