The Domincan Republic and Guatemale have entered into an Open Skies Agreement. The new agreement will allow airlines to combine…
ITA Airways Privatization Hits Road Bumps
Potential buyers for Italian flag carrier ITA Airways want more information about the carrier’s business plan and have sent the company more than 200 questions about the airline’s future as it continues to look toward a future away from government ownership. However, the airline’s president, Alfredo Altavilla, remains confident that the sale will take place by the end of June.
According to reports in various Italian newspapers, there appears to have been a slowdown in the process of privatizing the Italian flag carrier, ITA Airways. The two main suitors — MSC-Lufthansa and the U.S. fund Certares — seem to have hesitated in the last week.
Apparently, MSC-Lufthansa’s offer seems the “safer” one, despite having been reduced over time from 1.2 billion euros ($1.26 billion) in January 2022 to the current 1 billion euros with participation set at 60% for MSC, 20% for Lufthansa and the remaining 20% to the Italian Ministry of Economy and Finance, which would become a minority shareholder, as previously desired.
In contrast, the other offer from the U.S. fund Certares seems to be less “concrete” and more just an attempt by KLM-Air France to thwart Lufthansa in its purchase. That purchase proposal is not defined either on price or shareholder stakes — the proposal would be in the range of 600 and 900 million euros, and no shareholder percentages have been defined in any way.
Currently, the airline is 100% owned by the Italian Ministry of Economy and Finance and according to Altavilla, these kinds of offers are part of the sale process and it is quite normal what is happening. According to him, the sale will still be completed before the end of June.
Despite this calmness on ITA Airways’ side, the potential buyers requested more information about its Industrial Development Plan since the war in Ukraine is causing fuel prices to soar.
ITA Airways’ data room had already been opened on May 3 to potential buyers who had viewed confidential and sensitive documents about the carrier for sale, but they complained that it was opened to their advisors for just 20 days — from May 3 to 23 — a too short period to take decisions. Hence the reason for the more than 200 additional questions.
It is important to consider, however, that the longer the sale is delayed, the more the value of the airline will drop, and that is why the situation for the Italian government is not the best. The decision on the future of ITA Airways will be up to the current Italian Prime Minister, Mario Draghi, based on the opinions of consultants specially chosen to evaluate the privatization bids. In January 2022, the airline had hired four advisors to whom it would pay nearly 9 million euros, contract later reduced in March.
ITA Airways is in a great hurry to be sold, as the summer is already upon us and having uncertainty about the near future is never a good thing.
Spanish airline Iberia announced on Monday that it will recruit the first batch of pilots since the beginning of the…
Airline passengers this summer can continue to expect record flight cancellations as the aviation industry wages its battle against one…