Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Airlines

Portugal to Sell Majority Stake in National Airline TAP

5 months ago

Portugal’s Finance Minister Fernando Medina kicked off the long-awaited sale of TAP Air Portugal Thursday with the announcement that the government would sell a 51% stake in the state-owned airline to the highest bidder.

In addition to monetary value, the Portuguese government seeks an investor that wants to grow TAP and its Lisbon hub, guarantee jobs, and bring additional flights to secondary airports in the country, including Porto. The government did not specify how much it values TAP at; Portugal nationalized the airline as part of its Covid aid package to the carrier during the pandemic.

“We want large-scale investors from the aeronautical sector, alone or in consortia headed by them, that are aligned with our strategic goals,” Medina said. “We do not seek to attract pure investments of a financial nature that are looking to get into TAP to then sell it or sell parts of it and we wish to reiterate TAP’s strategic contribution to the country.”

A TAP Air Portugal plane. (Reuters)

Air France-KLM, International Airlines Group — owner of British Airways, Iberia, and other airlines — and the Lufthansa Group have all expressed interest in TAP. The Portuguese airline’s Lisbon hub is the ideally located for Europe-Latin America connections, as well as for connectivity to Africa. The hub is seen as a sought-after prize among the large European airline group’s as they jockey for an ever greater share of the market.

“TAP has a very strong position geographically at the southernmost point in Europe towards South America, and they do have a very strong network to Brazil with 11 cities online nonstop out of Lisbon,” Air France-KLM CEO Ben Smith said in May. “So it’s very interesting, and could be potentially eventually accretive to our bottom line performance.”

Portugal will first select advisors for the sale first with the aim to finalize the selection criteria by the end of the year, Medina. Talks with interested buyers will also begin but, based on the timeline he outlined, a deal is unlikely until sometime in 2024.

Airlines

Lufthansa Reaches $350 Million Deal for Italy’s ITA Airways: Report

9 months ago

Lufthansa finally has a deal. For ITA Airways that is, and according to reports.

The Frankfurt-based carrier will initially buy 40 percent of the state-owned Italian airline for $343-354 million (€320-330 million), according to a report by Italian daily Corriere Della Sera. Lufthansa would invest a further $537 million to raise its stake in ITA to up to 95 percent at a later date. A final agreement could be signed as soon as Thursday.

An ITA Airways Airbus A330neo
An ITA Airways Airbus A330-900. (ITA Airways)

The deal is the culmination of years of effort by Lufthansa to buy its way into the Italian market. The German carrier bid for a stake in ITA’s predecessor Alitalia as early as 2008, only to be out maneuvered by Air France-KLM. In the latest round of dealmaking, Lufthansa was counted out last year when a Certares-led consortium of Air France-KLM and Delta Air Lines was selected as the preferred bidder. But that deal fell through and Lufthansa was back in the running by December; the group made an official offer in January. Air France-KLM has, meanwhile, shifted its interest to acquiring TAP Air Portugal.

Lufthansa Group CEO Carsten Spohr has described the group as the “natural home” for ITA. Italy is Lufthansa’s largest market outside of its home markets, which include Austria (Austrian Airlines), Germany (Lufthansa and Eurowings), and Switzerland (Swiss Air). In May, Spohr said ITA’s Rome hub could be an integral southern gateway to Africa and Latin America for the group.

Lufthansa and the Italian government will need to European Union antitrust sign off before any deal for ITA could close.

Airlines

Lufthansa Climate Ad Banned in UK for Greenwashing

1 year ago

An ad by the Lufthansa Group has been banned in the UK after it was found to mislead consumers over the airline’s carbon emissions reduction efforts.

The ad in question was released last May with the tagline: “Connecting the World. Protecting its Future. #MakeChangeFly.” It was part of a campaign by Lufthansa to promote its efforts to achieve net-zero carbon emissions by 2050, including using more low-emission sustainable aviation fuels, and buying more fuel efficient aircraft.

However, the UK’s Advertising Standards Authority found Wednesday that the ad, which did not include any specific details of Lufthansa’s decarbonization efforts, was “ambiguous and not clearly linked to the environment,” and could mislead consumers.

“The tagline … was open to interpretation, but in conjunction with the imagery it would not be understood as an absolute promise about their service, especially one linked to the environment, that their services caused no harm to the environment,” the advertising regulator said.

In its defense, Lufthansa told the authority that the ad was not intended to be taken in isolation and included a hyperlink to a website that outlined its decarbonization efforts.

The Advertising Standards Authority found that the ad violated UK law after it “concluded that, because the basis of the claim had not been made clear and it had not been adequately substantiated.”

Airlines

Lufthansa Makes Official Bid for Italy’s ITA Airways

1 year ago

The Lufthansa Group has made an offer to buy a 40 percent stake in Italy’s state-owned ITA Airways, it said Wednesday. The bid comes after a multi-year process, or “beauty contest” as it has been called, to find a strategic partner for ITA, and a dramatic change of fortune for Lufthansa after being counted out last August.

Financial terms of the offer were not made public but Lufthansa said Wednesday that its initial offer for a minority stake includes taking full control of ITA in the future. Italian daily Corriere della Sera has previously estimated the value of the offer to be between $250-260 million (€230-240 million). The German airline group and Italy’s Ministry of Economy and Finance must next agree to a memorandum of understanding, which would allow exclusive negotiations over the final terms of the deal to begin.

The Lufthansa Group has submitted a bid for Italy’s ITA. (Airbus)

“For Lufthansa Group, Italy is the most important market outside of its home markets and the U.S.,” the airline said in a statement. “Italy’s importance for both business and private travel lies in its strong export-oriented economy and status as one of Europe’s top vacation spots.”

Lufthansa Group CEO Carsten Spohr has previously called the group the “natural home” for ITA.

The bid is a change of fortune for Lufthansa. In August, the previous Italian government selected a bid by private equity firm Certares and including commercial agreements with Air France-KLM and Delta Air Lines for ITA. However, the new government of Italian Prime Minister Giorgia Meloni failed to reach a deal with the Certares-led group before the exclusivity period expired on October 31. Air France-KLM has since shifted its takeover interest to TAP Air Portugal.

ITA replaced Alitalia as Italy’s national carrier in October 2021.

Airlines

Eurowings Pilots to Strike After Wage Talks Collapse

1 year ago

The Lufthansa Group cannot catch a break. Pilots at its budget subsidiary, Eurowings, will go on strike Thursday unless a last minute deal on wages can be reached.

Pilots union Vereinigung Cockpit said Tuesday that wage negotiations had “failed” and called for a one-day strike on October 6. The move came after 10 rounds of talks between the union and Eurowings without an agreement, Vereinigung Cockpit said.

eurowings at stuttgart-airport
(Eurowings)

The strike would be the second to hit the Lufthansa Group in as many months. Pilots grounded more than 800 flights at Lufthansa when they struck on September 2. Additional one-day industrial actions planned for later in September were averted when the airline and Vereinigung Cockpit reached a deal on wages.

The industrial actions come after a rough summer for airlines and travelers in Europe. Staffing issues at airports and airlines, as well as strikes at several carriers including bankrupt SAS, made flying on the continent a challenge for many. Adding to the woes was strong travel demand and full flights that made it difficult to reaccommodate disrupted flyers.

“The return to full normalization in terms of personnel, in terms of reliability, punctuality and our products … we believe we will reach this phase next year,” Lufthansa Group CEO Carsten Spohr said in August.

Eurowings is the 11th largest airline in Europe and is scheduled to operate 507 flights on Thursday, according to Diio by Cirium schedules. Its operations are concentrated in Germany with large bases in Dusseldorf, Cologne-Bonn, Hamburg, and Stuttgart.

Airlines

Lufthansa, Ryanair Sign Sustainable Fuel Deals Ahead of EU Mandate

1 year ago

The Lufthansa Group and Ryanair have signed significant new sustainable aviation fuel agreements ahead of an expected EU mandate aimed at boosting demand for the fuels.

Both airlines will take sustainable aviation fuel supplies from Austrian-based OMV beginning in 2023. Lufthansa has signed for 211 million gallons (800,000 metric tonnes) over seven years through 2030, and Ryanair for 53 million gallons over eight years. OMV will supply the carriers in Austria, Germany, and Romania. Both airlines cited their targets of net-zero carbon emissions by 2050 for the new sustainable fuel deals.

(Lufthansa)

The EU is preparing to implement new sustainable aviation fuel mandates next year. If finalized under the proposed ReFuelEU standards, 2 percent of all aviation fuel in the bloc would need to be sustainable — or generate at least half the carbon emissions of standard jet fuel — by 2025, and 6 percent by 2030.

Both Lufthansa and Ryanair, however, will need to do more to meet the EU’s proposed sustainable fuel targets. The former used roughly 2.9 billion gallons of jet fuel in 2019; the new OMV supply deal represents just 1 percent of that fuel usage on an annual basis.

Airlines

Swiss Air Cancels Hundreds of Flights Through October

2 years ago

Swiss International Air Lines is the latest to fall victim to the operational disarray European airlines find themselves in this summer.

The Zurich-based Lufthansa Group carrier will cancel roughly 2 percent of its schedule in August, September, and October in order to minimize disruptions, Swiss said Tuesday. That represents 676 flights over the three month period, which is a fraction of the more than 3,000 flights its group siblings Lufthansa and Eurowings are cancelling in July and August.

(Swiss International Air Lines)

“The complex aviation system in Europe and worldwide is currently operating at its limits,” Swiss CEO Dieter Vranckx said. “With the overall conditions still growing even more challenging, and in order to pay due and proactive regard to our responsibilities to our passengers, Swiss will be making this contribution to easing the present pressures on the system.”

Other European airlines, including EasyJet, British Airways, and KLM, have also reduced their schedules through the summer.