Italy government kicks off sale process for ITA Airways

Italy’s government said Friday that it has begun the process to sell Italia Trasporto Aereo, the successor to failed carrier Alitalia, following an approach last month by Mediterranean Shipping Co. with support from Deutsche Lufthansa AG.

The cabinet led by Mario Draghi signed a decree that starts the sale of the airline through a bidding procedure or via a direct sale, Finance Minister Daniele Franco said during a news conference in Rome. The Treasury “will initially keep a minority stake, which could be sold at a later stage,” he said.

Shipping giant MSC’s plan to buy the airline — known as ITA — includes bringing Lufthansa in as an industrial partner from the outset. Lufthansa could also eventually take an equity stake, the German carrier has said, while other airlines have reportedly shown interest.

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

The failed carrier consistently racked up losses and has only been able to continue flying by being propped up with state aid. ITA now wants to pick up the pace to secure an equity partnership by mid-2022, Chairman Alfredo Altavilla said during a parliamentary hearing.

Without a larger partner, ITA could have a hard time competing in a market that’s already well-served, with global airlines offering long-distance flights from Rome and Milan and strong European links through discount carriers including Ryanair Holdings Plc, EasyJet Plc and Wizz Air Holdings Plc.

Even ITA’s own projections see years of struggle ahead before the carrier starts making money. According to a business plan presented to lawmakers, ITA doesn’t expect to earn a profit before 2024.