Lufthansa (LH, Frankfurt International) and Italy’s Ministry of Economy and Finance have struck a deal on the future of ITA Airways (AZ, Rome Fiumicino) following weeks of negotiations that began in January but were extended beyond their initial deadline of April 24. The German flag carrier announced on the evening of May 25 that it will initially buy a 41% stake in its state-owned Italian counterpart.

It will pay EUR325 million euros (USD349 million) for the minority stake through a capital increase, which is more than the amount sources close to the talks had previously reported. Lufthansa at first proposed, unnamed Italian government sources told the newspaper Corriere della Sera earlier this week, an investment of EUR250 million (USD268 million), but the figure rose during the extended negotiations.

As part of the new agreement, the ministry has also itself committed to a capital increase of EUR250 million (USD268 million) into ITA.

In addition, the German and Italian sides “agreed on options to enable a potential acquisition of the remaining shares by Lufthansa at a later date. The purchase price for the remaining shares will be based on the business development of ITA Airways,” the German airline said, adding that contractual finalisation of the agreement “is expected to be completed shortly.”

Corriere della Sera’s sources claimed that Lufthansa intends to take full control in 2026 with a shareholding of at least 90%, leaving a minority stake in the hands of the Italian state.

CEO Carsten Spohr met Italian Economy Minister Giancarlo Giorgetti in Rome on May 25 to finalise the deal. Giorgetti said in the ministry’s own statement that ITA Airways’ business plan “envisages a revenue growth of EUR2.5 billion [USD2.7 billion] expected this year and a EUR4.1 billion [USD2.7 billion] forecast for 2027.”

Giorgetti further commented: “These results will allow for the growth and renewal of the fleet, which at the end of 2027 will have 94 aircraft compared to the current 71, with an average age of five years, and will guarantee the optimisation of fuel consumption and environmental impact. The workforce, which is expected to grow to 4,300 employees this year as a result of 1,200 hires currently being finalised, will increase to over 5,500 at the end of the plan.”

Once announced, the agreement will have to be approved by Italy’s Court of Audit. It will also need the stamp of approval of the European Commission, which could require three to four months of investigations, sources in Brussels told Corriere della Sera. The insiders elaborated that the Commission has already anticipated forwarding a block of requests to the two airlines including an “estimate” of the corrective operations they will have to carry out to avoid any kind of monopoly. Among these are the transfer of slots at airports such as Milan Linate and Rome Fiumicino.

“Upon closing of this transaction, ITA Airways and Lufthansa Group are expected to immediately start their cooperation at a commercial and operational level,” Lufthansa said. ITA will become “the fifth network carrier in the group’s multi-brand and multi-hub system [and ] will closely cooperate with Lufthansa Group to benefit from group synergies,” it added.

“Italy represents the most important market outside the group’s home base countries and the United States. Italy is the third-largest economy in Europe in terms of gross domestic product, with a strong export-oriented economy. This is one among many reasons why business travel to and from Italy is important. For private travellers, the Mediterranean country is one of the most popular leisure destinations in the world,” Lufthansa concluded.