Lufthansa: Alitalia still on the menu?

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The rumour mill around Lufthansa works on the basis of the harder they deny something the more likely it is to happen, until they actually officially say its not going to.

The were about to buy up Thomas Cook and Condor until a massive loss and emergency measures were needed at Eurowings to bring it back in line. It wasn’t just the cost related issues and losses at Eurowings, it was the realisation that the competition was so bitter and deep across Europe, integrating and operating the loss making parts of Thomas Cook were just too much to take on at the same time. Lufthansa Group is not adverse to walking away when the need arises, so it did.

And it’s already walked away from AlItalia once before, because the constraints being placed on it were too onerous and it wasn’t  being given a free enough hand.

Time has worn on – believe it or not  it was May 2017 when the airline collapsed. Propped up ever since by dubiously legal loans (under EU rules) from diverse arms of the Italian Government – the Italian Post Office for one (which is also a major banking facility for many Italians and has cash on deposit to loan).

Combinations of prospective partners have come and gone, some may stick around – especially the Italian railways.

Delta Airlines – who don’t want to see the airline leave its Skyteam super-alliance, easyJet and others have all offered their investment but could never reach a deal.

Now it appears, Lufthansa is on the verge of €200m investment, presumably in combination with a  non-airline partner like Ferrovia Dello Stato, the Italian railway company.

If Lufthansa takes on the airline – it’s a bargain price, and seems more like a management investment than a takeover. However Italy is desperate to get shot of the burden of the airlines day to finances and may well giev up a lot more control for less than it was once prepared to.

Any deal however is dependent on the powerful unions voting in favour of working for the new owners when they emerge. The irony is that AlItalia is doing quite well as is and most of the workforce would be happy to see it stay that way. It was the unions who refused to work with the bailout plan from Etihad back in 2017 that saw the now financially strapped carrier walk away and leave AlItalia to go bankrupt.

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