After the Italy-Lufthansa wedding, the first troubles arrive. On the one hand, the announcement of layoffs for former Alitalia workers not reabsorbed with a sudden outcry from the unions. On the other hand, the tile raining down from Brussels on Lufthansa with the move of EU Commission which turns the spotlight on the maxi subsidy granted by Berlin to the German company during Covid: they are now at risk 6 billion in state aid. In all this, while we are wondering about the possible repercussions (post-sale of Ita) on the dear tickets, the sale of some slots as requested by the EU (to preserve competition) and how the losses will be made up (the closing of the operation will take place by November), a name for the future CEO. Who is it about?
Ita, layoffs coming for former Alitalia
Will 2.245 Alitalia employees left at home. The official communication to the unions came from Alitalia and Alitalia Cityliner, a subsidiary of the former national airline now replaced by Italy Airways. The extraordinary commissioners of the two companies have declared that there is no longer any room for maneuver for negotiations. Both companies are currently in extraordinary administration. The dismissal will come for 2.198 Alitalia employees and 47 Cityliner employees. The 2.245 workers who will undergo the dismissal procedure are located throughout the national territory. Among the cities interested there are also Rome, Milan, Bari, Bologna, Catania, Venice e Verona. The layoffs will act as a parachute for dismissed workers until 31 October 2024.
Lufthansa, trouble with Brussels
The support received in times of crisis has already been returned – with interest – to the German state coffers. But the case of 6 billion euros given by Berlin to Lufthansa during Covid continues to hold sway in Europe. Just concluded the celebrations for the long-awaited EU gives green light to marriage with Italy, the German ski giant returns under the lens of Margrethe Vestager's team, who decided to launch a "more in-depth" investigation into the recapitalization decreed in 2020 by then Chancellor Angela Merkel.
A measure that at the time received the favor of Brussels and then remained rejected by the European Court of Justice with a first degree ruling entirely in favor of the fierce rival - and appellant - Ryanair. If the outcome of the new EU antitrust examination proves negative, the company led by Carsten Spohr would be called upon to 'repay' the subsidy by paying the difference between the conditions under which it received the aid and those under which it would have obtained it on the market.
Always at the center of controversy due to the large fiscal space that allows it to distribute aid to its industry at the risk of weakening the single market, Berlin had developed a scheme for its national airline divided into three components: one capital participation for 306 million euros a silent participation not convertible into shares for 4,7 billion and convertible for another billion. A measure compatible, in Brussels' opinion, with the extraordinary rules on state aid introduced to avoid letting companies succumb to lockdowns. Even with some constraints: to benefit from the aid, Lufthansa had to respect the prohibition on distributing dividends and strict limitation of remuneration – including bonuses – of its management. The crane company was then ordered to give up up to 24 daily slots in Frankfurt and Munich to allow competing carriers to establish a base there.
All stakes that have not deterred Ryanair from its tough legal campaign against "the spree of state aid donated" by the EU "to the national airlines" and calculated at over 40 billion euros with Air France, Tap and Klm reign supreme. In May 2023 the EU Court accepted the appeal of the Irish low cost company, arguing that the EU antitrust should have monitored the German recapitalization more carefully. In its new investigation the EU will look more closely at Lufthansa's eligibility for aid.
Ita-Lufthansa, who is in pole position for the role of CEO
Il next CEO of Ita Airways “It will be someone who understands Lufthansa, the airline sector and Italy, because the integration between the two companies will also have to be cultural, broad shoulders are needed”. The identikit made by Lufthansa's number one, Carsten Spohr, in the press conference a few days ago on the next CEO of the Italian company seems to lead straight to Joerg Eberhart.
Il German manager He currently holds the position of Chief Strategy Officer of Lufthansa, but in the past he was President and CEO of Air Dolomiti, a company controlled by the German group, knows the Italy where he lives very well, speaks Italian and has followed the ITA dossier. It is undoubtedly, therefore, the perfect bridge between the two cultures, as well as having all the skills of the aviation sector.
Lufthansa will, however, be able to appoint its members to the ITA board only after the closing of the operation, expected for the fourth quarter of this year. In fact, after the closing, i.e. the definitive contract, an extraordinary meeting will be called which will proceed to decide on thereserved capital increase of 325 million euros by Lufthansa and the appointment of tbsp that will have five members, three appointed by the Ministry of Economy and Finance, including the president, and two by Lufthansa, one of whom will take on the role of CEO. In this first phase of the partnership, Ita's development strategy will be shared between the two shareholders, the operational delegations will be attributed to the CEO. The second phase will then open in the 2025-2027 window, which will see Lufthansa committed to taking over a further 49% of the capital for a further 325 million euros.
