Successor to Alitalia
“Lufthansa is one of the best partners for the ITA”
05/25/2023 3:46 p.m
Lufthansa is now supposed to fix what KLM, Air France and Ethihad failed at: the attempt to turn the national Italian airline, which operated under the name Alitalia until 2021, into a successful company. The deal between the Kranich line and the Italian government, sole owner of ITA, stipulates that the Germans will initially take a 40 percent stake. For this, the government of Prime Minister Giorgia Meloni will receive 320 million euros. Should ITA then manage to get out of the red by 2026, under operational Lufthansa management, Lufthansa undertakes to take on a further 50 to 55 percent for a sum of around 500 million euros.
This is a good deal for Italy, because Alitalia and today ITA have been a pure loss maker for decades. Since 2008, governments of all persuasions have repeatedly tried to sell the line, but resistance in politics and unions has prevented the sale to this day: in politics, selling to “foreigners” was considered a betrayal of a “national” line, after all you need it as a proud country its own airline. And the unions feared for their jobs. The sale was blocked again and again and foreign shareholders were annoyed.
DBut the reality of Alitalia’s perpetual crisis has been massive job losses: just 3,500 out of 21,000 employees 15 years ago, and Italy’s “national” airline has become irrelevant both at European level and in Italy itself. In Europe, even before the corona crisis in 2019, the Italians transported only 1.9 percent of all passengers, in Italy the market share was just 13 percent. ITA is not a big airline, but has good growth opportunities, “also thanks to the integration of Lufthansa,” says traffic expert Andrea Giuricin in an interview with ntv.de.
Andrea Giuricin teaches at the Bicocca University in Milan. He is a transport expert and has been following the Alitalia issue for many years.
(Photo: private)
ntv.de: Why did it take so long to sell?
Andrea Giuricin: On the one hand, politicians are responsible for this, because they always want to directly or indirectly control an airline that has not been competitive for too many years. A market that has changed and where Alitalia – today ITA – never found its position. Furthermore, the unions have played a very negative role in this, trying to maintain an impossible status quo under the guise of nationalism.
But from 2008 attempts were made to privatize the airline.
What went wrong with the attempted privatizations was that the government did not think about the development of air transport, believing that it could operate an airline nationally without having the capacity to do so.
The trade unions have also repeatedly prevented the sale. The last time Lufthansa wanted to buy Alitalia was when the line still had 11,000 employees and they said in Frankfurt, let’s keep 7,000 to 8,000. Now it’s only half.
That was certainly a grave mistake. At that time, trade unions and politicians believed that it was possible to go it alone without looking for a strong partner. The unions are complicit because, together with politicians, they have effectively run an airline that has not been able to survive in the market. Then, with the Covid19 crisis, it all crashed.
What do workers think about it today?
I believe that those who want the good of ITA want a strong partner with whom they can grow their network and expand routes in the medium to long term. And Lufthansa is certainly one of the best partners to do this, even if it will be very complex, since the difficulties in the air transport market are much greater after the Covid19 crisis. I would like to remind you that in 2022 the Italian air transport market registered about 30 million fewer passengers than in 2019, with the intercontinental market struggling the most.
So either Lufthansa or downfall?
The ITA cannot survive long on the market alone. I think reality knocked on the door very loudly.
Often in Italy, when defending the idea of a “national” line, it was said that it would bring foreign tourists to Italy. How important is the national airline in European incoming traffic to Italy?
The Italian air transport market has changed significantly in the last 25 years and the market share of all other airlines in inbound and outbound tourism is now over 96 percent.
What is the future of ITA in the LH Group?
Being part of a large group is positive for ITA employees and the opportunity for growth, including through the excellent Rome Fiumicino Airport – which received its fifth Skytrax star a few months ago – can help in this future growth process.
What are the really important advantages that make Lufthansa buy ITA today?
Lufthansa is making the deal because there are real growth prospects: the ability to develop long-haul flights to South America and Africa from its Fiumicino hub is undoubtedly one of the key assets in the game. With around ten million passengers in 2022, ITA is not a large operator, but has good growth opportunities in the long-haul segment, also thanks to the integration of Lufthansa.
Udo Gümpel spoke to Andrea Giuricin