Italy’s ITA Airways gets new state funding as sale process slows

Italy is preparing to give ITA Airways a further cash injection, as the newly elected right-wing government reviews plans to sell the state-controlled carrier in the coming months. 

The Finance Ministry has approved a new outlay of €400 million ($400 million) to support ITA, the successor to failed flag carrier Alitalia, people familiar with the matter said. 

That would bring total public financing for the airline, which only began operations last year, to €1.1 billion, following the approval of a €700 million capital increase. 

The newest capital injection is seen as essential to keep ITA flying in the wake of a slower-than-expected process to sell it off. 

The government led by Prime Minister Giorgia Meloni is expected to reopen the field to possible buyers, after a period of exclusive talks with an investor group led by Certares Management LLC expired without a deal. 

The Meloni government could now restart talks with MSC Mediterranean Shipping Company SA and its partner Deutsche Lufthansa AG, which lost out in the initial bidding for the carrier. 

Going back to the drawing board could allow Rome to hold on to as much as 49% of the company, Bloomberg reported last week, allaying concerns within the ruling coalition on fully losing control of a one-time state asset. 

ITA Chairman Alfredo Altavilla resigned on Monday following clashes with the company’s board over strategy. He had favored a deal with MSC and Lufthansa, according to Italian media reports, leading the board to strip him of his powers in order to push ahead on talks with Certares.