Investing.com — Shares in Lufthansa Group (ETR:) edged higher on Thursday after the German airline’s chief executive said, in an interview with Italian daily Corriere della Sera, that the carrier would consider raising its stake in Italy’s ITA Airways to 90%, starting from early next year.
Carsten Spohr was speaking after his company won approval from European Union antitrust authorities on Wednesday to buy 41% of state-backed ITA for 325 million euros.
The deal gives Lufthansa a stronger foothold in the key southern European market and bolsters its attempt to offset an uptick in costs with elevated scale. Spohr also said the move will grant Lufthansa better access to routes to Africa and Latin America.
Expected to close in the fourth quarter of 2024, the transaction will make Italy Lufthansa’s fifth home market, trailing Germany and U.S. in terms of market revenue size.
Under the agreement with the EU, Lufthansa and ITA will also cede some Italian short-haul flights to one or two of their peers. The deal will not be finalized until the rivals — approved by EU officials — have begun operating these routes.