Lufthansa’s FOMO
FOMO – the Fear Of Missing Out, it’s hard to find any other reason for Lufthansa’s irrational desire to acquire a strategic stake in ITA, the latest re-incarnation of the Alitalia one of Europe’s greatest and forever failing legacy airlines. Surely it can’t be for the Armani styled uniforms, the pasta or indeed the network, so why on earth would an airline of German efficiency want to go where other major carrier has been before and failed. It’s a good question and an even harder one to answer!
From a market perspective ITA will this summer operate around 12 million scheduled seats across some 75,000 flights which ranks them 14th or 15th depending on which measurement you take. That places the airline slightly ahead of Swiss and Austrian, both owned by Lufthansa but operated as separate entities. Alitalia has a 1.5% share of the total Western European market hardly an earth-shattering proportion; and certainly not needle moving in the greater scheme of the European market. Indeed, even in Italy whilst ITA are the second largest carrier with a 13% share of the market, Ryanair both dominate the market and ruthless compete with a 34% share of capacity and close to three times as many seats. Cut the numbers any way that you like the truth is that at best from a strategic positioning perspective then ITA isn’t perhaps the greatest opportunity out there this summer…and that’s before anyone untangles the spaghetti…and there is lots of that to untangle!
Commercially ITA and indeed its predecessor in Alitalia have been members of the Skyteam Alliance since 2021 introduced to the group by their then close partners KLM and Air France who have over the last twenty years tried to turn the airline around on numerous occasions but sadly failed in their efforts. Is ITA of any value to Lufthansa and the Star Alliance, maybe, maybe not. But even if it is they will first need to untangle all the existing partnerships that ITA have in Skyteam; that will take years and in that time all ITA will do is feed Lufthansa’s competitors which seems a senseless investment.
So, if it’s not strategic share or a marked improvement in an alliance position that Lufthansa are getting, it must be the network or then again maybe not. Lufthansa currently serve 70 country markets, ITA serve some 23 country markets and the only country market not served by Lufthansa but served by ITA this summer is the Maldives, a market of very few high yielding frequent travellers with onwards connectivity for Lufthansa.
It really is hard to find any rhyme or reason from why Lufthansa would have any interest in ITA, aside from the FOMO of missing out where others have failed and perhaps the chance to massage some corporate egos. Naturally we wish Lufthansa all the success in the world but quite why someone would invest so much on something that in time would wither on the vine seems strange, but then again FOMO makes people and corporations do strange things!!