Lufthansa bids for ITA stake

STORY: Lufthansa made an offer to buy a minority stake in ITA Airways on Wednesday (January 18).

Two sources close to the matter said the German carrier wants 40% of the company.

One said it was valued at up to $540 million.

The German airline said Italy is the most important market outside of its existing home markets and the U.S.

Its move comes as Europe's airlines struggle to recover after the health crisis.

The cost-of-living crunch also has investors worried about the potential for weaker demand, while the costs of wages, fuel and other inputs have soared.

Italy's economy minister said Lufthansa was the only bidder, and they will now review the offer and decide whether to approve it.

The bidding process has strict terms, though.

Lufthansa must ensure it will develop Italy's main hubs, and guarantee ITA has access to strategic markets and more long-haul routes.

ITA Airways is the successor to Alitalia, which made billions in losses for years.

ITA itself posted a loss of about $184 million in 2021.

Many analysts saw a merger with a stronger rival as the only option left for the carrier.