Lufthansa’s Integration of ITA Airways: Boosting International Travel Opportunities – Travel And Tour World

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This past week marked a significant development in the aviation industry as the European Commission gave the green light to Lufthansa’s acquisition of ITA Airways. This move will ultimately result in Lufthansa owning the entirety of the Italian national airline, expanding its already substantial portfolio that includes carriers such as Austrian Airlines, SWISS, and Brussels Airlines. This acquisition holds broad implications not only for the Italian aviation sector but also for global connectivity to Italy.

In a discussion with Simple Flying, Andrea Giuricin, a transport consultant based in Italy, emphasized the critical role this acquisition plays in bolstering the Italian aviation sector and securing its future growth.

Lufthansa plans to develop a major hub at Rome’s Fiumicino Airport, which is also the main base for ITA Airways. In a recent interview with Corriere, Lufthansa CEO Carsten Spohr shared his vision of expanding the group’s reach globally, despite their current primary focus on Europe, North America, and Asia, with lesser emphasis on Africa and South America.

The integration of ITA Airways into the Lufthansa Group is set to enhance connectivity, particularly to regions that currently lack strong links with Lufthansa’s network. ITA Airways has been actively expanding its long-haul services, notably launching new routes to Dakar, Senegal, and announcing plans for services to Bangkok, reflecting its strategic focus on enhancing long-distance connections amidst fierce competition from budget carriers.

According to data from Cirium, here’s the allocation of ITA Airways’ seats to various continents in June 2024.

North America plays a pivotal role in ITA’s strategy for long-haul flights. Giuricin pointed out to Simple Flying that with substantial investments in renewing ITA’s fleet for both short and long hauls, the focus should remain on leveraging ITA’s distinct Italian branding. The airline utilizes a mix of Airbus A330ceos, A330neos, and A350s for its intercontinental operations.

Despite the growth of low-cost airlines significantly reducing ITA’s market share from 45% in 1997 to a mere 9% in 2023, ITA is striving to maintain its standing in the market. On the domestic front, while Ryanair dominates with nearly 50% market share in 2023, ITA holds about 26%. The situation is more challenging in the intercontinental market, where ITA’s share is under 10% in 2023, with a forecast for 2024 ranging between 10 and 12%.

The European Commission has mandated several concessions for the merger to proceed. These include requiring the combined airline to give up slots at Milan Linate Airport to help competitors establish themselves on vital routes from Italy to Central Europe. Furthermore, on the intercontinental level, there will be a need for cooperation with other airlines to maintain competitive services, especially towards North America.

Giuricin views the concessions in the short-haul sector as reasonable given the merged entity’s strong presence at Milan Linate and its established routes to key Lufthansa Group hubs in Europe. However, he questions the rationale behind the required sacrifices on intercontinental routes.

Looking ahead, ITA is set to join the Star Alliance and partake in the transatlantic joint venture with United and Air Canada between 2026 and 2027. Lufthansa plans to increase its stake in the Italian carrier to 90% by early 2025. As the German hubs in Frankfurt and Munich are approaching their capacity limits, ITA’s expansion on the intercontinental front from Rome-Fiumicino, which has potential for growth, will be crucial.

ITA Airways has already commenced further intercontinental expansion with new flights to Dakar that started on July 3, utilizing an Airbus A321neo with four weekly flights. Additionally, a new route from Rome to Accra, Ghana, began in June, and services to Bangkok are set to commence in November, operating five times a week.