ITA Airways was born on October 15, 2021 from the ashes of Alitalia (ITA AIRWAYS/AFP/Handout)
After many attempts by Rome to get rid of Alitalia, which has sealed the public accounts, the government of Mario Draghi opened the way on Friday to the privatization of the young shoot born from its ashes, ITA Airways.
The first contenders in the ranks, the maritime transport giant MSC and its ally Lufthansa had expressed their interest in January, two years after an aborted project by the German company to seize Alitalia.
The government presented to the Council of Ministers “a decree allowing the start of the process of finding partners for ITA Airways”, with a view to a “public offer or a direct sale”, announced the Minister of the Economy Daniele Franco.
Rome decided to open the sale process to all potential buyers, without granting MSC and Lufthansa the “90-day period of exclusivity” they had requested.
“We expect that in a first phase the government will retain a minority and non-controlling share, which can be sold later,” Franco said.
MSC had just proposed to buy “the majority” of the capital of ITA Airways and asked that the government “retain a minority stake”.
The enterprise value of ITA Airways is estimated by experts at between 1.2 and 1.4 billion euros.
A sale of ITA Airways would be a major success for the government, as over the years the Italian state has had to shell out more than 13 billion euros to try to get the flag carrier back on its feet.
But nothing worked: Alitalia, placed under public administration in 2017, accumulated losses of 11.4 billion euros between 2000 and 2020 before going out of business.
Its inexorable drift has been exacerbated by the Covid-19 pandemic, which has grounded airlines around the world.
ITA Airways, which took off on October 15, 2021, is looking for partners to strengthen its position, especially in long-haul.
-Taxpayer money-
“An assignment to MSC and Lufthansa could be the final chapter in a story that has already cost the taxpayer too much money,” Andrea Giuricin, a transport economist at Bicocca University in Milan, told AFP.
The logo of ITA Airways, which is looking for buyers (ITA AIRWAYS / AFP / Handout)
An alliance with Lufthansa could, according to him, allow ITA Airways to develop its strong potential for flights in South America.
“ITA Airways will not be able to survive alone, without the support of a major European company. During the first two and a half months of its existence, it lost 135 euros per passenger transported”, argues Mr. Giuricin.
It suffered an operating loss of 170 million euros last year, carrying 1.26 million passengers between mid-October and the end of 2021.
The Italian-Swiss shipowner MSC is counting on synergies in freight and passenger transport. The group led by the Aponte family, of which MSC Cruises is a part, is the world leader in maritime freight.
MSC has benefited from the surge in freight prices and strong demand experienced by global shipping since mid-2020, once the initial shock of the pandemic was overcome.
– Competition from low cost –
An ITA Airwys plane bears the inscription “Born in 2021”, before taking off from Fiumicino airport in Rome, on December 2, 2021 (AFP/Vincenzo PINTO)
ITA Airways is not its only target, MSC having proposed in December to the French group Bolloré to buy back its logistics activities in Africa.
Thanks to strong allies, ITA Airways will be able to “better resist competition from low-cost companies”, explained Mr. Giuricin.
The market share of its ancestor Alitalia on international routes departing from and arriving in Italy was limited to 7.7% in 2020, far behind Ryanair (29.5%), Easyjet and Lufthansa.
The boiling CEO of Ryanair Michael O’Leary assured the Italian press on Wednesday “never to have been afraid” of ITA Airways, which would end up as “Lufthansa’s low-cost airline”.
In response, ITA offered itself pages of advertising in the newspapers to invite him to board one of its flights to “finally be able to live this experience which he probably only dreamed of, because very different from the low cost ones”.
© 2022 AFP
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