Lufthansa is looking for a discount on its ITA Airways deal following massive losses posted by ITA. The Italian state-owned airline announced losses of nearly half a billion USD, which the company blamed on Covid, fuel costs and the Russia-Ukraine war.
The Italian government has been looking to reform its air travel following decades of difficulty which culminated in former state carrier Alitalia being re-nationalized in 2020 after being privatized in 2009. ITA Airways is a new entity established in 2020 to reorganize Alitalia, and the government plans to privatize ITA as soon as possible. Lufthansa has submitted a proposal for a minority stake in the airline, while the Italian goverment is currently looking at a joint bid from Air France, KLM, and Certares to take a majority stake.
When the Lufthansa proposal for a 40 per cent in ITA was revealed in JAN, the deal was estimated to be between USD $250 and $260-million, with the option to buy more shares down the line. But now that the massive losses for ITA for 2022 have been posted, Lufthansa CEO Carsten Spohr says ITA's valuation needs to change. ITA says it expects "further substantial growth" this year. Spohr says he hopes a deal is done before the deadline at the end of MAR.
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