Aviation

Italy believes that ITA Airways’ current rates are not good enough

The Italian government has asked parties interested in acquiring national carrier ITA Airways to resubmit their bids, deeming the current offers insufficient. The two-horse race to take over the Italian carrier is likely to conclude within the next few weeks. Let’s take a closer look below.

ITA rates are not up to par

At yesterday’s press conference in Italy, Italian Economy Minister Daniele Franco said that consortia want to seize ITA Airways will be asked to come up with new bids as the Italian government considers the current bids not good enough.

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Bidding for an airline closed on May 23, leaving only two interested coalitions after the American investment company Indigo Partners fell out of the picture. According to Frank, the current rates are not quite in line with the government’s privatization goals ITA.

The Italian government wants to reach an agreement by the end of September. Photo: Airbus

Two competing groups are fighting for ownership of the ITA Lufthansa and the Swiss-Italian shipping group MSC, which faces Air France-KLMDelta Air Lines and Certares Joint Stock Consortium.

There is a clear sense of urgency in the takeover deal as outgoing Prime Minister Mario Draghi looks to seal the deal before he leaves office next month.


Lufthansa’s patience is running out

The Italian government is at risk of abandoning Lufthansa entirely if it cannot act quickly, following comments from the airline’s chief executive. Sale of ITA to MSC and Lufthansa everything seemed ready to go in February before other interested parties entered the picture.

Lufthansa CEO Carsten Spohr said this week,

“We believe that we need to be quick here. Our patience is not infinite. They need a partner, and we are the right one.”

The Lufthansa-MSC partnership was initially seen as the front-runner to take over after Lufthansa’s interest was reported in January. Italian officials reportedly prefer this option as it involves a controlling stake of 60% of the shares of the Swiss-Italian firm MSC with the German airline Lufthansa getting a 40% stake.

The Lufthansa-MSC bid looked set to move forward as early as February. Photo: Getty Images

However, there is a compelling case for the Sertares-led group, which includes ITA alliance members SkyTeam, KLM, Air France and Delta.

While the move would certainly make sense given the SkyTeam tie-up, the Lufthansa-MSC bid is said to be financially stronger at between 1.2 billion euros ($1.22 billion) and 1.5 billion euros ($1.53 billion).

Acceleration of absorption

Prime Minister Mario Draghi, still acting as acting prime minister after announcing his resignation in July, is keen to see any takeover over the finish line before he leaves.

Draghi will leave his post on September 25 when Italy holds a general election, and he reportedly hopes to continue the sale over the next 10 days.

Italian officials had previously planned the takeover for June, but things did not go as expected. The loss-making carrier recently requested a bailout of 400 million euros to add to the 700 million euros it received in 2021.

Who do you think is the best candidate to head ITA Airways? Let us know your insights in the comments.

https://simpleflying.com/italy-ita-airways-new-proposals-requested/ Italy believes that ITA Airways’ current rates are not good enough

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