Lufthansa to Take 90% Stake in ITA Airways for €325M

Germany's Lufthansa Group will increase its stake in ITA Airways to 90%, a move that significantly advances the Lufthansa ITA Airways acquisition and accelerates European airline consolidation. The decision was announced by Chief Executive Carsten Spohr at the company's annual general meeting. Lufthansa will exercise its options in June to raise its holding from the current 41%, with the transaction expected to close in the first quarter of 2027.

The deal solidifies Lufthansa's multi-hub strategy, adding Rome as a key southern European gateway and intensifying its competition with rivals like Air France-KLM. The acquisition is a critical step in reshaping the continent's aviation landscape, marking the fourth time Lufthansa has absorbed a formerly state-owned carrier and positioning it for further expansion, including a potential bid for Portugal's national airline.

Transaction Details and Regulatory Hurdles

According to the announcement from Lufthansa Group's investor relations, the purchase price for the second tranche of shares is a fixed €325 million. Following this step, Lufthansa is expected to be able to acquire the remaining 10% stake from the Italian government from 2028 onwards. The completion of the 90% acquisition by Q1 2027 is contingent on receiving regulatory clearance.

The transaction requires approval from multiple authorities to ensure fair market conditions. The European Commission (EC) will conduct an antitrust and merger clearance review to assess the deal's impact on competition within the European aviation market. Additionally, approval from the U.S. Department of Justice (DOJ) is necessary for the full integration of ITA Airways, officially known as Italia Trasporto Aereo, into Lufthansa's transatlantic joint ventures.

Lufthansa Group CEO Carsten Spohr emphasized the strategic imperative behind the move. "As a national airline with only one home market, Lufthansa would not be globally competitive," he stated, noting that only around 20% of the group's turnover is currently generated in Germany. The integration of ITA is reportedly the fastest in the group's history, establishing it as the fifth network airline in its portfolio.

A Modern Fleet and Strategic Fit

ITA Airways brings a significantly modernized fleet into the Lufthansa Group. According to corporate data from ITA Airways, the carrier operates 106 aircraft with an average age of just 6.5 years. Spohr highlighted that approximately 70% of this fleet meets the latest standards for fuel efficiency and reduced CO2 emissions, making it the most modern fleet within the entire group. This aligns with the broader industry trend of fleet modernization for sustainability, as airlines seek to cut fuel consumption by 20-25% with next-generation aircraft.

The acquisition of ITA, the successor to Alitalia, provides Lufthansa with a crucial foothold in the Italian market and strengthens its Star Alliance network with a major hub at Rome Fiumicino (FCO). This impacts rival alliances, as ITA is set to transition from SkyTeam.

European Consolidation and the Bid for TAP

The ITA deal is a central event in the ongoing consolidation of the European airline market, which is increasingly dominated by three major legacy groups: Lufthansa Group, Air France-KLM, and IAG. With fewer independent national carriers remaining, the next major target is TAP Air Portugal, the national airline also known as Transportes Aéreos Portugueses.

Lufthansa is in direct competition with Air France-KLM to acquire a stake in the Portuguese carrier, with binding offers for the TAP Air Portugal privatization expected to be submitted in July 2026. However, some analysts suggest that Lufthansa's growing market concentration in Southern Europe following the ITA deal could face scrutiny from regulators, potentially complicating its bid for TAP. According to the European Commission's competition policy, such market dominance is a key area of focus.

Historical Precedents and Integration Blueprint

Lufthansa has a well-established history of acquiring and integrating national airlines. The 2005 acquisition of Swiss International Air Lines serves as a blueprint for integrating a carrier while preserving its distinct brand identity and hub, a model that turned SWISS into a highly profitable subsidiary. Similarly, the phased buyout of Brussels Airlines between 2008 and 2016 mirrors the tranche-based structure being used for the ITA acquisition.

This pattern is not unique to Lufthansa. The recent move by Air France-KLM to acquire a stake in SAS, which resulted in the Scandinavian carrier leaving Star Alliance for SkyTeam, is a direct parallel of a major group absorbing a struggling national airline to expand its regional influence.

Technical Analysis

The acquisition of ITA Airways is a definitive move by Lufthansa Group to secure market leadership in Southern Europe and counter the strategic expansion of its primary competitors. This development is less about adding a single airline and more about executing a long-term, multi-hub strategy that diversifies revenue streams away from its German home market. By integrating ITA's modern, fuel-efficient fleet, Lufthansa not only gains network advantages but also accelerates its sustainability goals. This action follows the successful precedent set by the SWISS and Brussels Airlines integrations, suggesting a clear and proven roadmap. The concurrent bid for TAP Air Portugal indicates an aggressive final push in the European airline consolidation endgame, aiming to create a network that is resilient and geographically balanced. The primary risk remains regulatory, as the European Commission will closely scrutinize the potential for reduced competition on key European routes.

What Comes Next

The timeline for Lufthansa's expansion is clearly defined over the next two years. The option to increase the ITA stake to 90% will be formally exercised in June 2026. Following that, binding bids for the privatization of TAP Air Portugal are due in July 2026. The most significant milestone is the expected closing of the ITA transaction in the first quarter of 2027, which is subject to final approvals from the EC and DOJ. Looking further ahead, Lufthansa has an option to acquire the final 10% of ITA Airways from the Italian government beginning in 2028.

Why This Matters

Lufthansa's move to control ITA Airways fundamentally redraws the competitive map of European aviation. It solidifies a 'big three' market structure, putting immense pressure on the few remaining independent national carriers. For travelers, this could mean more integrated networks and loyalty programs but also potentially less competition on certain routes. For the industry, it signals that the era of large-scale consolidation is reaching its conclusion, with the final strategic assets like TAP Air Portugal now in play.