That’s Amore: Indigo Partners expresses interest in ITA Airways

At the beginning of the race to take over ITA Airways, interest was rather low. But Alitalia’s successor seems to be gaining suitors and the only initial option, Lufthansa in partnership with MSC, has been joined by new candidates.

Ads

According to Leonard Berberi, a journalist for Corriere della Sera, Indigo Partners presented an «extremely serious and detailed» proposal, which was described as «interesting» by the Italian Ministry of Economy, the sole shareholder of the peninsular operator.

Why is Indigo interested in ITA?

Indigo’s big bet can have two major points of attraction: on the one hand, the Italian and southern European market is sufficiently important to be worthwhile. Reaching North Africa and the Middle East with its own operator would give Indigo a presence on four continents.

On the other hand, having ITA serve as a long-haul carrier on the ever-coveted routes to the Americas, with the low-cost carriers it has scattered throughout the Americas and Europe serving as feeders for that operation would be a logical expansion strategy.

Ads

Imagining a passenger flying on JetSMART (Frontier, Spirit, Volaris, or Lynx Air) to one of the hubs where ITA operates in South America to reach Rome and from there continue the connection to other European destinations through Wizz Air would not be far-fetched.

Moreover, it would give it a competitive advantage over other low-cost operators, putting it in a ring closer to the operations of the biggest ones: Lufthansa, KLM/AF and IAG.

What will Indigo’s chances be in this competition? With AF/KLM/Delta and Lufthansa/MSC in the mix, the fight is not an easy one. According to Berberi, the favorite is still the German airline, because its comprehensive offer (which also includes an important development of the cargo business) allows the current owner to think of a better medium/long term perspective.

However, the last word is with the Italian government, which now has a problem that is far preferable to that of a few months ago: ITA still does not generate profits, but at least it is not short of candidates.