The German airline Lufthansa sought to alleviate concerns among investors about ITA Airways’ financial health on Friday. Following approval from the European Union, Lufthansa announced plans to acquire 41% of the Italian carrier.
ITA Airways, which was established three years ago, has been working to distance itself from the troubled history of its predecessor, Alitalia. In its final 14 years of operation, Alitalia used up an estimated $10.8 billion of state funds.
Lufthansa CEO Carsten Spohr expressed confidence in the economic viability of the acquisition on Friday. The company agreed to certain concessions as part of the deal, which took over a year to finalize.
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 next year. However, details of the concessions made by Lufthansa are still being examined as part of the approval process.
Overall, Lufthansa’s move is seen as a positive step towards strengthening ITA Airways’ financial position and positioning it for long-term success.
