< Reveal sidebar

ITA Airways: 2023 Results and 2024 Goals

ITA Airways improved its finances in 2023 but will face financial hurdles and legal battles in 2024 that will determine its position in the commercial aviation industry.

ITA Airways’ first A321neo (Photo: Airbus)

As ITA Airways strides into 2024, the airline faces challenges and opportunities, grappling with financial losses and legal battles. The outcome of these situations will be crucial in determining ITA Airways’ role in the competitive and dynamic aviation landscape in 2024.

The Italian national carrier, which launched operations in October 2021, taking over from the defunct Alitalia, has had a rocky start financially. In 2022, the Italian airline reported revenues of €1.58 billion ($1.745 billion) and over 10 million passengers, but these figures were overshadowed by a staggering net loss of €486 million​​ ($537 million). The previous year, 2021, wasn’t any better, with the airline accruing €90 million ($99 million) in revenues and an operating loss of €147.9 million ($163 million), despite transporting 1.32 million passengers​​ in two months (since October 2021).

The airline’s performance was significantly hampered by the challenging “startup” phase and a weak market, exacerbated by the ongoing pandemic and macroeconomic factors like the Russian invasion of Ukraine and fluctuating euro/dollar exchange rates​​.

At the end of 2023, the airline aims to break even operationally, possibly achieving slightly favorable terrain, contrasting starkly with the previous year’s losses.

Strategic Alliance with Lufthansa in 2024

A pivotal development for ITA Airways is its emerging partnership with Lufthansa. The Italian airline is negotiating with the German carrier to sell a 40% stake, estimated to be worth €250-300 million. The deal, which involves the Italian Ministry of Economy and the German Group, is set to define ITA’s development in terms of fleet, network, and strategic goals​​.

The preliminary agreement awaits approval from Italian and European regulatory authorities. The pronouncement from the European Commission should not arrive before late spring, with adverse effects on the high summer season of the Italian national carrier. However, the EU Antitrust’s green light is anticipated between late July and early August 2024​​. The stake sale to Lufthansa is expected to close by the end of 2024, after which Lufthansa can begin managing ITA Airways.

Complicating ITA Airways’ journey are legal issues concerning hiring former Alitalia employees. Nearly 180 ex-Alitalia workers have been waiting for months to be employed by ITA Airways. Despite a court ruling in their favor, ITA Airways still needs to comply with this decision. The case revolves around whether the transition from Alitalia to ITA Airways constituted a transfer of a company branch or two separate operations​​.

ITA Airways argues for the latter, stating the two airlines are distinct entities. This stance has legal implications regarding the obligation to rehire Alitalia’s former employees. Despite the legal contention, ITA Airways has pledged to follow the court’s decision, aligning with its business needs and plans​​.

In 2024, ITA Airways will negotiate with several banks for a €300 million ($321 million) loan to finance its fleet expansion. To be guaranteed 80% by the state-controlled Italian trade credit insurer Sace SpA, this loan aims to expand ITA’s fleet from 82 to 95 aircraft by the end of 2024.

Vincenzo Claudio Piscopo
Latest posts by Vincenzo Claudio Piscopo (see all)

Author

  • Vincenzo Claudio Piscopo

    Vincenzo graduated in 2019 in Mechanical Engineering with an aeronautical curriculum, focusing his thesis on Human Factors in aircraft maintenance. In 2022 he pursued his master's degree in Aerospace Engineering at the University of Palermo, Italy. He combines his journalistic activities with his work as a Reliability Engineer at Zetalab.

    View all posts

Subscribe to AirlineGeeks' Daily Check-In

Receive a daily dose of the airline industry's top stories along with market insights right in your inbox.

Related Stories

Cascade of Events Led to Last Year’s Austin Incursion

The National Transportation Safety Board (NTSB) concluded that a near-collision between a Southwest Boeing 737-700 and a FedEx Boeing 767-300…

Etihad Airways, China Eastern Tie-Up in New Joint Venture

On Wednesday, Etihad Airways published an announcement about inking an agreement on a joint venture with China Eastern Airlines. The…

Nigeria Clears 98% of Airlines’ Blocked Funds

Nigeria has emerged as a noteworthy example in the repatriation of revenue from international airlines operating within its borders. At…