Lufthansa CFO cautions profitability at ITA will take some time

Lufthansa’s finance chief cautioned against a quick turnaround of Italy’s national airline ITA Airways after its purchase, while expressing confidence the German carrier has the financial muscle to forge an overdue industry consolidation. Lufthansa has the capacity to acquire other airlines even as it enacts a turnaround at loss-making ITA, though it would only do so if it adds value for the group, Remco Steenbergen said in an interview in London. Lufthansa is close to a deal to acquire a minority stake in ITA as soon as next week, giving it better access to one of Europe’s biggest travel markets. “When there are opportunities in Europe for other airlines, we will carefully look whether it makes sense to add them to the portfolio or not,” Steenbergen said. Lufthansa is in expansion mode as the global travel sector recovers from the coronavirus pandemic. The carrier is set to take over ITA in two steps, starting out with a stake of about 40% before assuming full ownership. Such a move will help mitigate the risk of absorbing the perennially unprofitable asset that’s soaked up billions in Italian state support over the years. “All parties involved know it takes a little time,” Steenbergen said of the task of turning ITA into a profitable company. “But together we have outlined a clear path to reach this goal.” While many smaller national carriers have been absorbed by the three large regional airline groups — Lufthansa; Air France-KLM and IAG SA — there are still some assets up for grabs. Portugal’s Prime Minister Antonio Costa has said that Lufthansa communicated interest in national flag-carrier TAP SA, and SAS AB in Stockholm may be seeking a buyer once it exits insolvency proceedings.<br/>