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 the current bids as insufficient, the country’s economy and finance minister, Daniele Franco, said during a news conference.

The two bidding consortiums - MSC-Lufthansa on one side and the private equity fund Certares, which is understood to be with Air France-KLM and Delta Air Lines, on the other - had already sent in second binding offers in early July. They will now have to quickly send a third version so that the winner can be announced in ten days, Franco outlined on August 4. The rush is also partly driven by looming parliamentary elections set for late September.

“Neither of the two proposals received for ITA is fully consistent with the requirements of the Prime Minister’s Office. For this reason, in a very short time, within days, they will be asked to formulate further proposals and will be asked to respond in a very short time,” Franco declared, as quoted by the newspaper Corriere della Sera.

“The objectives of the operation are to maximise the value that will be held by the state, but also a series of other objectives, from governance to the industrial structure to the use and size of the hubs. It’s a question of giving an overall evaluation,” he added.

Prime Minister Mario Draghi, who remains in a caretaker capacity until the appearance of a new government, stressed to the gathered reporters that he wants his administration to complete the sale procedure.

“The goal is to proceed, and it is not my intention to leave the matter to the next government,” Draghi said. “The choice of winner will be made within the time that the Ministry of Economy and Finance will give, which I think is very short, ten days.”

An unnamed source told Corriere that although there is a preference for the MSC-Lufthansa bid, the main issue lies in the configuration of ITA Airways’ governance, as the ministry would like to be assured of greater weight in making crucial decisions. Sources close to MSC said that an ITA led by MSC would recast the airline by giving Italy a global centrality in logistics.

The news conference came hours after Lufthansa CEO Carsten Spohr said that the German carrier was the best partner for ITA but warned: “We wrote a letter to [...] Draghi saying that we need to be fast, our patience is not infinite.”

Speaking during a Lufthansa Group earnings call, he also said: “We will make [Lufthansa subsidiary] Air Dolomiti (EN, Verona) grow. We want a strong position in Italy in one way or another, we hope with ITA but otherwise with our own means.”

“Beyond political developments, ITA needs a partner and we think we are the right one. This is independent of which party or group of parties governs the country. The unions of ITA have become active in asking the current government for a quick solution. [...] It is also a new thing for me, that unions demonstrate for Lufthansa,” he added.

Lufthansa executives said during the call that they expect demand for short-haul flights in Europe to drive growth at its airlines this year. They now expect a full-year adjusted operating profit of more than EUR500 million euros (USD511 million), a swing from last year’s EUR2.3 billion (USD2.35 billion) loss. Bookings for the group’s airlines for the August-December period are at 83% of pre-pandemic levels on average, and it is hoped that business-travel bookings will reach 70% in the fourth quarter.