Lufthansa sought to ease concerns among investors regarding ITA’s financial health on Friday. This came after the German airline received EU approval to acquire 41% of the Italian carrier. ITA Airways, which was established three years ago, has been working to distance itself from the troubled history of its predecessor, Alitalia, which used up an estimated $10.8 billion of state funds in its final 14 years of operation.
Lufthansa has set a two-year timeline to evaluate ITA’s financial situation before considering a full acquisition. CEO Carsten Spohr expressed confidence on Friday in the economic viability of the acquisition. The approval process for Lufthansa’s purchase of a stake in ITA took over a year, with the company agreeing to certain concessions as part of the deal.
Spohr indicated that he anticipates cost improvements for ITA and downplayed concerns about the airline’s leasing debt. In an interview with Italian media on Thursday, Spohr mentioned that Lufthansa could potentially acquire a 90% stake in ITA by the following year. The details of the concessions made by Lufthansa as part of the approval process are still being examined.