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ITA Airways aircraft at Rome Fiumicino Airport. (Photo: ITA Airways)

ITA Airways Heading Towards Privatization

In recent days, consultants from the Italian government’s ministry have been sorting out draft contracts for the final sale of Italy’s national airline, ITA Airways. As already known, it had been announced on Aug. 31 that it had been chosen by the Italian government to go ahead with an exclusive negotiation with the consortium formed by Certares, a U.S. private capital company, Delta Air Lines and Air France-KLM.

For this reason, ITA Airways reopened on September 16 its Data Room, which holds the Italian airline’s most confidential documents. Entering was Certares, the U.S. fund that is exclusively negotiating and also a group of experts in international shipping routes from the U.S. company Delta Airlines.

According to the Italian newspaper “La Repubblica”, the two counterparts have already exchanged drafts of the two final divestment contracts, namely the Sales and Purchase Agreement (SPA) and the Shareholders’ agreement (Sha), which regulates relations between shareholders.

However, despite these very concrete demonstrations of interest, the general elections on September 25 and the formation of a new government in October are imminent deadlines that should not be underestimated. Certares, Delta, and Air France-KLM have allowed the Italian state to have 45 percent of ITA’s shares (as opposed to MSC-Lufthansa, which would leave no more than 20 percent), meaning the Italian state would retain two of the five board members with broad veto powers over strategic decisions and the ability to appoint the airline’s president. The shareholding structure would then consist of Certares with 40.1 percent, Air France-KLM with 9.9 percent and Delta with 5 percent, and 45 percent the Italian government as the majority shareholder.

The election of the new Italian government in October represents the deadline for the sale of ITA Airways, since if it is passed, it would mean having to start over, or even blow up the privatization.

Another factor forcing an accelerated timetable is rising fuel prices. ITA Airways about a week ago announced that there may be cash flow problems in November, which if not resolved in time, will make it impossible to face the coming season. 

If fuel prices rise another 20 percent and if the pandemic situation deteriorates further, restricting travel and thus air travel, the matter could become critical. Apparently, by December, the cash level could fall below the 100 million safety threshold, becoming unsustainable. For the next winter season, between 100 and 150 million will be needed.

The Certares fund, noting the Italian flag carrier’s cash flow difficulties, has taken precautions with a “price adjustment” mechanism, that is, if ITA Airways’ accounts turn out to be less solid it will pay less money for the acquisition.


  • Vincenzo graduated in 2019 in Mechanical Engineering with an aeronautical curriculum, focusing his thesis on Human Factors in aircraft maintenance. Currently, he is pursuing his master's degree in Aerospace Engineering at the University of Palermo, Italy. He combines his journalistic activities with his work as a Safety and Reliability Engineer at DMD Solutions.

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