Lufthansa CEO expects Italy’s ITA to boost profits by hundreds of millions

BERLIN, Jan 13 (Reuters): Lufthansa (LHAG.DE) expects its planned stake in Italy’s ITA Airways to increase the German flagship carrier’s profits by hundreds of millions of euros in the coming years, Chief Executive Carsten Spohr told the Frankfurter Allgemeine Zeitung (FAZ) newspaper in an interview published on Monday.

The German airline is set to acquire 41 percent of ITA, the successor airline to bankrupt Alitalia, for 325 million euros ($335 million) on January 13, a source familiar with the situation told Reuters last week, bringing to a close years of talks.

“Without the prospect of a contribution to earnings in the three-digit million range, we would not have taken this step,” Spohr said about Lufthansa’s acquisition.

The European Commission approved in November a package of competition remedies securing more routes for the German flag carrier’s peers, paving the way for the deal to go through.

Also read: Chinese airlines rush into Europe as western carriers retreat, reports FT

Spohr reiterated that a 100% takeover is the “clear goal” but increasing its stake is not currently planned for 2025.

“It is in our interest to keep the Italian government on board in the coming months,” he said, adding that the companies will need about 18 months to completely integrate their systems.