Lufthansa bids with MSC for Alitalia successor ITA Airways

Deutsche Lufthansa AG confirmed on Tuesday that it made a joint bid with container giant MSC Mediterranean Shipping Company SA to buy Italia Trasporto Aereo, known as ITA, the successor to failed carrier Alitalia.

That sets up a possible two-horse race for ITA, with Lufthansa and MSC likely to face off against a group backed by the German carrier’s European rival Air France KLM.  

US-based Certares Management LLC, a travel and tourism-focused investment firm headed by Hertz Global Holdings Inc. Chairman Greg O’Hara, is leading the rival bid, according to people familiar with the matter, and it may have commercial support from Air France-KLM and US-based Delta Air Lines Inc.

Air France-KLM said Tuesday it plans to sell about 2.26 billion euros ($2.4 billion) of new shares to shore up its balance sheet and repay a chunk of the state aid that helped it survive the coronavirus pandemic.

Lufthansa shares fell 2.4% in early trading in Frankfurt on Tuesday. 

The Italian administration led by Prime Minister Mario Draghi announced in February that it had kicked off the process to sell ITA. The sale of the carrier, in the wake of a series of failed divestments by other Italian governments, would mark a major success for Draghi, the one-time president of the European Central Bank. 

Alitalia, a serial loss-maker, was only able to continue flying thanks to state aid. ITA’s management is now looking to pick up the pace in securing an equity partnership by mid-2022, Chairman Alfredo Altavilla said during recent parliamentary hearings.