It looks like the group is trying to expand in Italy.
It is possible that the Lufthansa could invest in the airline.
Italian media is reporting that a German company may be interested in investing in Italy's new national airline. There are negotiations taking place for the Lufthansa Group to take a stake in the airline.
As part of a potential agreement, Lufthansa could help ITA Airways with maintenance, network and fleet growth.
The Italian flag carrier is receptive to cooperation with the Lufthansa Group, at least in principle, because of the strong interest shown by the management.
According to a report, the airline wants to invest in the airline.
What is the motive for investing in ITA?
Why would the airline be interested in investing in it? It is hard to imagine that the airline will be profitable, as it is simply Italy's new airline that replaces Alitalia. Italy is the second largest international market after the United States for Lufthansa.
This wouldn't be the first airline in Italy that Lufthansa invests in. Air Dolomiti is a small, regional carrier that is owned by Lufthansa. It doesn't really give the airline much beyond its main hub in Germany.
Air Dolomiti is owned by Lufthansa.
In Italy, the biggest challenge has been competing with SkyTeam. Alitalia and ITA Airways joined the SkyTeam alliance. With the cooperation of Air France-KLM and Delta, it would be difficult for Lufthansa to grow beyond its current position.
It seems that the investment in ITA Airways would mostly be about trying to get more market share in Italy from competitors. It is not known if the Star Alliance will approve the attempt by Lufthansa to get ITA Airways into the joint venture.
I don't think this ends well.
I can understand why Lufthansa would be interested in partnering with an airline in Italy. There were rumors that the airline Alitalia would be invested in by the German airline.
I don't see how this will work out for Lufthansa. The problems that existed at Alitalia will likely continue at ITA Airways.
The Italian government didn't have a good track record of running Alitalia.
Over time, it is likely that the airline will become bloated and inefficient like Alitalia, with labor issues.
The Italian short haul market is very competitive.
Italy is a more leisure-oriented destination than Germany and the United Kingdom, so it can be difficult to fly out of Italy.
I am curious to see how this plays out. I think it's pretty clear how many airlines were interested in investing in Alitalia, but ultimately decided against it. Over time, the efficiency of ITA Airways will likely change.
The airline wants to grow in Italy.
The bottom line.
The group is interested in investing in the airline. Italy is a huge market for the German airline group, and partnering with Italy's national airline would give them the ability to grow their market share. The question is whether the airline can make money. I am curious to see how this plays out.
Do you think it makes sense for Lufthansa to invest in ITA Airways?