Italy has asked bidders vying for a majority stake in ITA Airways (AZ, Rome Fiumicino) to come up with better proposals as the government sees current bids as insufficient, the country’s economy and finance minister has said. , Daniele Franco, during a press conference.
The two candidate consortia – MSC-Lufthansa on the one hand and the private equity fund Certares, which would be with Air France-KLM and Delta Air Lines, on the other – had already sent a second firm offer at the beginning of July. They will now have to send a third version quickly so that the winner can be announced in ten days, Franco explained on August 4. The rush is also partly driven by the impending legislative elections scheduled for the end of September.
“Neither of the two proposals received for the ITA fully complies with the requirements of the Prime Minister’s Office. For this reason, in a very short time, in a few days, they will be asked to make new proposals and they will be asked to respond in a very short time,” said Franco, quoted by the Corriere della Sera newspaper.
“The objectives of the operation are to maximize the value that will be owned by the state, but also a series of other objectives, from governance to industrial structure to the use and size of hubs. It’s about giving an overall assessment,” he added.
Prime Minister Mario Draghi, who remains on an interim basis until a new government emerges, told the assembled journalists that he wanted his administration to complete the sale procedure.
“The goal is to continue, and I have no intention of leaving the matter to the next government,” Draghi said. “The choice of the winner will be made within the time that the Ministry of Economy and Finance will grant, which I think is very short, ten days.”
An unnamed source told the Corriere that although there is a preference for the MSC-Lufthansa bid, the main problem lies in the governance setup of ITA Airways, as the ministry would like to be assured of greater weight in making crucial decisions. Sources close to MSC said an MSC-led ITA would overhaul the airline, giving Italy global logistics centrality.
The press conference came hours after Lufthansa CEO Carsten Spohr said the German carrier was the best partner for ITA, but warned: “We have written a letter to […] Draghi saying we have to be quick, our patience is not infinite.
Speaking on a Lufthansa Group earnings call, he also said: “We will [Lufthansa subsidiary] Air Dolomiti (EN, Verona) is growing. We want a strong position in Italy one way or another, we hope with ITA but otherwise with our own means.
“Beyond political developments, the ITA needs a partner and we believe we are the right one. This is independent of the party or group of parties that governs the country. ITA unions have become active in demanding a quick solution from the current government. […] It is also new to me that the unions are demonstrating for Lufthansa,” he added.
Lufthansa executives said on the call that they expected demand for short-haul flights in Europe to drive growth for its airlines this year. They now expect full-year adjusted operating profit of more than 500 million euros ($511 million), a variance from the loss of 2.3 billion euros (2. $35 billion) from last year. Group airline bookings for the August-December period average 83% of pre-pandemic levels, and business travel bookings are expected to reach 70% in the fourth quarter.