Italy in talks to sell ITA Airways to Delta, Air France-KLM and US fund

Italy is in exclusive talks to sell a controlling stake in ITA Airways, the successor company to bankrupt Alitalia, to Delta Air Lines, Air France-KLM and US private equity firm Certares.

The three placed one of two bids in May for a 20 per cent stake in ITA Airways. In a statement on Wednesday the Italian Treasury, which controls the business, said this offer was deemed “more respondent to [the government’s] objectives.”

It added that a binding agreement would be reached only if the negotiations fully satisfied the Treasury.

In February, the Treasury was given a mandate by the cabinet to search for a buyer, as Rome sought to accelerate the airline’s privatisation after its bailout in 2021.

Germany’s Lufthansa and Swiss-Italian shipping conglomerate MSC had previously expressed an interest in acquiring a majority stake and had been deemed the preferred contenders until this week.

In January, ITA boss Alfredo Altavilla told the Financial Times that the potential deal with Lufthansa and MSC was a “very compelling solution” for the carrier, which needs to find an international partner to expand beyond its domestic market.

MSC is the world’s largest container shipping group and hoped to expand into air cargo through the deal, while Italy is Lufthansa’s main foreign market. The German airline’s chief executive Carsten Spohr in May told Italian newspaper Corriere della Sera that Rome would become the group’s southern hub.

However, people close to the negotiations between the Treasury and the two groups of contenders said that an expansion into the US market proposed by Certares, Delta and Air France-KLM, had been deemed more attractive and potentially profitable.

Lufthansa said in a statement that the treasury’s decision to enter exclusive negotiations with their competing bidders “allows for more state influence and does not provide for a full privatisation of ITA”.

The financial details of the bid have not been made public. The Italian Treasury and the other companies involved declined to comment.