IThere is no longer any place for middleweights in air transport in Europe, where consolidation is coming to an end with the privatization of two national companies: ITA Airways, born from the dismantling of Alitalia at the end of 2021, and TAP Air Portugal , urgently renationalized in 2020.
In both cases, Air France-KLM and the German Lufthansa are in the running, both interested in the Italian market, Africa and intercontinental services, in particular the United States. Since August, we thought the case (almost) played in the Peninsula: to everyone’s surprise, Rome had declared its preference for the offer of the American fund Certares associated with two commercial partners, the Franco-Dutch group and the American Delta Air Lines.
Giorgia Meloni has just reopened the game. And any nationalist she may be, the new president of the Italian council could accept a frank privatization, provided that the buyer is an industrial partner more than a financial one. This is the profile of the German company, which was ready to take 80% of ITA with the Italian-Swiss MSC, the world leader in maritime transport, for 850 million euros.
Fragile recovery
She declared herself, Wednesday, November 2, “still interested in true privatization”, which would protect it from state interventionism. The Franco-American coupling does not present this industrial profile. And the European Commission prohibits Air France-KLM from investing more than 10% in ITA Airways until it has reimbursed the state aid granted in 2020 to overcome the crisis linked to Covid-19.
If it loses in Italy, will Air France-KLM win in Portugal, where the socialist government must – again under pressure from Brussels – reprivatize TAP? Its managing director, Benjamin Smith, has just confirmed that he is open to a ” partnership “or even a “participation” in the Lusitanian company. The latter certainly achieved a remarkable third quarter and reduced its losses. But its recovery is fragile, and it must lean on a large group.
The problem with “legacy airlines” remains competition from low-cost carriers. Focused on rapidly expanding short-medium-haul flights, more agile in reducing costs and with cash, they are emerging from the health crisis without too much damage, even if the British easyJet will post its third consecutive year of losses in 2022. . There is also consolidation in the air in a market where the Irish “super low cost” Ryanair or Hungarian Wizz Air have declared war on the “high end low cost” symbolized by easyJet.