Ita flies to Lufthansa. A correct choice

The route is now set and the Lufthansa group is moving quickly towards the conquest of Ita Airways, the former Alitalia. The signals are unmistakable: last Friday the technical meetings with the Germans ended at the headquarters of the Italian company in Fiumicino and a formal offer is expected any moment. At the same time, the government is paving the way to facilitate the operation: the Council of Ministers has approved a Prime Ministerial Decree with the aim of speeding up the procedures for the sale of Ita Airways, allowing the new partner to enter into a minority in Ita and then possibly take the majority.

Everything finally seems to be going in the right direction. But will the Lufthansa solution really be the best possible ending for the former national airline?

First of all, we need to come to an agreement on the definition of national airline, which was so widely touted when some politicians, from Silvio Berlusconi onwards, opposed the sale of Alitalia, arguing that it was important for the country to have an all-Italian airline. In truth, there are now many countries that have maintained their own national airline but whose ownership is no longer local: the airlines of Switzerland (Swiss), Belgium (Brussels) and Austria (Austrian) are part of the Lufthansa group. The Spanish Iberia is incorporated into the International Airlines Group (IAG) created together with British Airways, which also controls Aer Lingus, the Irish national airline. Air France-KLM is the merger of two large national airlines, one French, the other Dutch, which however maintains a strong state presence in the capital: the government of Paris owns 28.5 percent of the group and the Dutch 9.3 percent. In the United States the concept of a national airline does not exist and the market is effectively an oligopoly dominated by the three main American airlines: Delta, American and United.

“Ownership doesn’t matter,” confirms Giovanni Fiori, professor of business economics at Luiss and commissioner of Vecchia Alitalia. “Instead, it is essential that the State has a direct or indirect presence to protect the company and consequently its own interests. The flow of travelers should not be suffered but managed: this is how it is done in other countries.”

In the case of Ita, it is now clear to everyone that it is too small to stand alone. Since 2000, the Italian company has accumulated losses of over 14 billion euros, paid by taxpayers and partly also by private shareholders. And its share, in a national flight market that is the fourth in Europe, has gone from 60 to 18.25 percent in the last twenty years, leaving open spaces for Ryanair and Easyjet. So entry into a large group is inevitable.

And according to the experts consulted by Panorama, Lufthansa represents a good solution: Andrea Giuricin, an economist at the University of Milan Bicocca and a transport expert, underlines that the German group «has demonstrated its ability to manage a multi-hub system with its controlled companies, consisting of the airports of Vienna for Austrian Airlines, Zurich for Swiss and Brussels for Brussels Airlines. But to have a role in the Lufthansa group, Ita Airways must conquer new traffic at Fiumicino, especially towards the Americas and Africa».

Furthermore, the German airline market would seem to be complementary to the Italian one: Lufthansa’s objective is to improve outgoing connections from Germany, traffic outboundwhile Ita on the contrary must strengthen the incoming ones, inbound. It is therefore in Lufthansa’s interest to bring more people to Italy. And then, as Giuricin recalled, the German company is used to managing a multi-hub situation, like Italy, where there are many cities with their airports, unlike Air France which is more focused on Paris. Finally, Lufthansa boasts a history of great success with the relaunch of the companies it has purchased.

It is important that the government supports this operation while at the same time guaranteeing the development of Fiumicino. Getting the country out of the Ita sinkhole would be a great success for the Meloni government.