Italy government

The Italian government launches the process of selling ITA Airways

(Bloomberg) —

The Italian government said on Friday it had begun the process of selling Italia Trasporto Aereo, the successor to bankrupt carrier Alitalia, following an approach last month by Mediterranean Shipping Co. with backing from Deutsche Lufthansa. AG.

The cabinet led by Mario Draghi has signed a decree that launches the sale of the airline through a tender procedure or through a direct sale, Finance Minister Daniele Franco told a press conference in Rome . The Treasury “will initially retain a minority stake, which can be sold later,” he said.

Shipping giant MSC’s plan to buy the airline – known as ITA – includes integrating Lufthansa as an industry partner from the start. Lufthansa could also potentially take a stake, the German carrier said, while other airlines have reportedly expressed interest.

The sale of ITA, after previous governments’ repeated failures to sell Alitalia, would mark a major success for Draghi, the former president of the European Central Bank.

The bankrupt carrier constantly racked up losses and was only able to continue flying with the support of state aid. The ITA now wants to pick up the pace to secure an equity partnership by mid-2022, President Alfredo Altavilla told a parliamentary hearing.

Without a larger partner, ITA could struggle to compete in an already well-served market, with global airlines offering long-distance flights from Rome and Milan and strong European links via discount carriers including Ryanair Holdings Plc, EasyJet Plc and Wizz Air. Holdings Plc.

Even the ITA’s own projections predict years of struggle before the carrier starts making money. According to a business plan presented to lawmakers, ITA does not expect to turn a profit until 2024.

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