(MENAFN- The Peninsula) AFP
Milan: Italy and Lufthansa signed a deal on Thursday for the German company to buy "a minority stake" in ITA Airways, which rose from the ashes of state-owned Alitalia, the Italian government said.
The accord is big news for Italy, which has had to spend more than 13 billion euros ($13.9 billion) over the years trying to get the national airline back on its feet.
The size of the stake was not mentioned in a finance ministry statement, but a government source told AFP that Lufthansa plans to initially acquire a 41 percent stake, while reserving the option of increasing it in the medium term.
In mid-January, Lufthansa submitted its offer to acquire an initial minority stake of up to 40 percent in the Italian airline.
The deal was finalised in Rome between Lufthansa Chief Executive Carsten Spohr and Italian Finance Minister Giancarlo Giorgetti.
It will see Lufthansa "take over a minority stake, after having already shared the company's business plan, which envisages a revenue growth of EUR 2.5 billion expected this year and EUR 4.1 billion forecast for 2027", the finance ministry wrote.
"These results will allow for the growth and renewal of the fleet," said the statement, citing 94 planes at the end of 2027 versus the current 71.
ITA's workforce, planned to hit 4,300 after hiring this year, will grow to more than 5,500 at the end of the plan, it said.
"ITA Airways' strategy is to establish itself as a leading full service carrier in the three sectors of intercontinental, international and domestic, with a focus on long-haul traffic," it added.
Alitalia, which was placed under public administration in 2017, accumulated losses of 11.4 billion euros between 2000 and 2020.
It was eventually shut down in October 2021, leaving the runway clear for ITA Airways.
ITA launched in a market struggling to recover from the turbulence of the coronavirus pandemic, but Brussels gave the state a green light for a 1.35-billion-euro injection to help it take to the skies.