MSC makes bid for Italy’s airline


Mediterranean Shipping Company (MSC) has joined with Lufthansa to a make an offer for the latest incarnation of Alitalia, now known as ITA.

Press reports over the weekend, apparently unconfirmed, asserted that Lufthansa was interested in taking a 40% equity stake in ITA. Reuters and Italian newspapers are suggesting that the deal could be agreed towards the end of January. It is believed that other airlines including IAG/British Airways and KLM/Air France may be interested, although the management of Delta airlines has said that it is not planning to make any investment in ITA. Press reports have suggested that Lufthansa has asked for a period of exclusivity in negotiations.

However, the emergence of MSC in the negotiations is somewhat of a surprise. MSC is being quoted as explaining its interest in ITA as deriving “interest from the possibility of activating positive synergies for both companies in the cargo and passenger sectors where the MSC Group is a global leader.” As such, it is being reported that the combination of Lufthansa and MSC are looking to purchase a majority of ITA. Press rumours suggest a price-tag of €1.2 bn-€1.5 bn, although this seems unsubstantiated.

ITA, or Italia Trasporto Aereo S.p.A., was created in the summer of 2021 as a vehicle for the viable assets of the old Alitalia, which although owned by the Italian state, had been in form of administration. ITA operates flights to 45 destinations, with around half being domestic routes. Most of the international routes are in the Mediterranean area.

MSC is experiencing a wave of profits due to the explosion in container freight rates and thus has cash to spend. Its rivals, Maersk and particularly CMA CGM have successfully expanded into forwarding, the latter through the purchase of CEVA. CMA CGM has also been aggressive in the establishment of a freighter aircraft fleet, something which may have influenced MSC’s interest in ITA. Yet even so, buying part of a predominately passenger airline is an unusual move.

Source. Transport Intelligence, 25th January 2022

Author: Thomas Cullen