THE italian billionaire shipowner Gianluigi Aponte, who turned a one-boat cargo operation into the world's biggest shipping company thinks he can save an airline operation that's landed a profit just once in 75 years of flying.
Mr Aponte's Mediterranean Shipping Co (MSC) is teaming up with Deutsche Lufthansa AG to bid for ITA, the successor to Alitalia, a one-time symbol of Italian glamour that's cost the Italian state billions of euros in unrecovered bailouts and failed takeover attempts.
Armed with MSC profits earned amid sky-high shipping rates, MSC founder Mr Aponte, 81, is betting his firm can turn a profit in an Italian aviation market that's a key battleground for low-cost carriers like Ryanair Plc and Wizz Air Holdings Plc. 'It's a curious one,' said Peter Sand, chief analyst at Xeneta, a shipping data and analytics company. 'You'd expect them to make acquisitions in the field of air cargo, not air passengers.'
MSC recently became the world's largest container line after the coronavirus pandemic unleashed port disruption and unprecedented demand for consumer goods, pushing cargo rates to record highs. The Geneva-based company started out with one ship in 1970 and steadily bought vessels during the crisis, bringing its fleet to 638 boats, the largest in the world.
Shipping rivals AP Moller-Maersk A/S and CMA-CGM Group have recently expanded in airfreight to capture a bigger slice of the growing market and reposition themselves as end-to-end logistics providers. CMA CMG is even establishing a fleet of wide-body freighters, but neither has gone as far as to buy a passenger airline.
By using the below-deck capacity of ITA passenger jets, MSC would also gain access to a higher-speed mode of transport and profit from long-haul routes from Europe to the US and Asia, said Alfredo Altavilla, executive chairman of the state-owned Italian carrier.
'MSC could materially boost its business, making its cargo shipping interoperable worldwide through an owned airline like ITA,' Mr Altavilla said in a telephone interview.
Acquiring ITA would also benefit MSC's cruise-line business, enabling it to move its passengers to terminals, he said.
With an industry reputation for shrewd business acumen and a secretive manner, the Aponte clan is one of Italy's richest business dynasties. Mr Aponte, who handed over day-to-day running of the company to his son Diego in 2014, remains executive chairman.
Lufthansa, Europe's largest airline by fleet size, would be MSC's industrial partner in the proposed deal, but with a minority stake at most. The German airline flirted with Alitalia for years but refused to invest until the loss-making company was restructured and bloated labour costs reduced.
For ITA, a partnership would likely prompt a switch to the Lufthansa-led Star Alliance and transatlantic-revenue-sharing venture, away from Delta Air Lines Inc.'s Sky Team.
Since coming aboard last year, ITA's Mr Altavilla has made progress thinning down the predecessor's payroll and set plans to modernize the fleet with a deal for 59 Airbus SE jets. Still, he has said the company is too small to survive alone.
Turning ITA into a profitable business would be a formidable challenge. The new airline lost EUR170 million (US$192 million) in its first three months of operation, eating into the EUR700 million the Italian government had given it to start flying again after the closure of Alitalia.
The 'outlook for ITA Airways is challenging,' HSBC analyst Andrew Lobbenberg said in a research note, pointing to political and geographical challenges that haven't changed despite the establishment of a new airline. 'Italy is a decentralised economy that is very hard for a home-country airline to dominate.'
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Mr Aponte's Mediterranean Shipping Co (MSC) is teaming up with Deutsche Lufthansa AG to bid for ITA, the successor to Alitalia, a one-time symbol of Italian glamour that's cost the Italian state billions of euros in unrecovered bailouts and failed takeover attempts.
Armed with MSC profits earned amid sky-high shipping rates, MSC founder Mr Aponte, 81, is betting his firm can turn a profit in an Italian aviation market that's a key battleground for low-cost carriers like Ryanair Plc and Wizz Air Holdings Plc. 'It's a curious one,' said Peter Sand, chief analyst at Xeneta, a shipping data and analytics company. 'You'd expect them to make acquisitions in the field of air cargo, not air passengers.'
MSC recently became the world's largest container line after the coronavirus pandemic unleashed port disruption and unprecedented demand for consumer goods, pushing cargo rates to record highs. The Geneva-based company started out with one ship in 1970 and steadily bought vessels during the crisis, bringing its fleet to 638 boats, the largest in the world.
Shipping rivals AP Moller-Maersk A/S and CMA-CGM Group have recently expanded in airfreight to capture a bigger slice of the growing market and reposition themselves as end-to-end logistics providers. CMA CMG is even establishing a fleet of wide-body freighters, but neither has gone as far as to buy a passenger airline.
By using the below-deck capacity of ITA passenger jets, MSC would also gain access to a higher-speed mode of transport and profit from long-haul routes from Europe to the US and Asia, said Alfredo Altavilla, executive chairman of the state-owned Italian carrier.
'MSC could materially boost its business, making its cargo shipping interoperable worldwide through an owned airline like ITA,' Mr Altavilla said in a telephone interview.
Acquiring ITA would also benefit MSC's cruise-line business, enabling it to move its passengers to terminals, he said.
With an industry reputation for shrewd business acumen and a secretive manner, the Aponte clan is one of Italy's richest business dynasties. Mr Aponte, who handed over day-to-day running of the company to his son Diego in 2014, remains executive chairman.
Lufthansa, Europe's largest airline by fleet size, would be MSC's industrial partner in the proposed deal, but with a minority stake at most. The German airline flirted with Alitalia for years but refused to invest until the loss-making company was restructured and bloated labour costs reduced.
For ITA, a partnership would likely prompt a switch to the Lufthansa-led Star Alliance and transatlantic-revenue-sharing venture, away from Delta Air Lines Inc.'s Sky Team.
Since coming aboard last year, ITA's Mr Altavilla has made progress thinning down the predecessor's payroll and set plans to modernize the fleet with a deal for 59 Airbus SE jets. Still, he has said the company is too small to survive alone.
Turning ITA into a profitable business would be a formidable challenge. The new airline lost EUR170 million (US$192 million) in its first three months of operation, eating into the EUR700 million the Italian government had given it to start flying again after the closure of Alitalia.
The 'outlook for ITA Airways is challenging,' HSBC analyst Andrew Lobbenberg said in a research note, pointing to political and geographical challenges that haven't changed despite the establishment of a new airline. 'Italy is a decentralised economy that is very hard for a home-country airline to dominate.'
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