ROME, ITALY — In a move aimed at accessing the profitable transatlantic market and optimizing European flight schedules, the German civil aviation giant will establish a hub in the South.

Lufthansa Group has announced that it will invest €325 million for a stake of 41% in the Italian airline, while Italy's economics ministry is set to contribute an additional €250 million.

Lufthansa plans to integrate ITA Airways with other airlines in its expansive group, such as Eurowings, Swiss, Brussels Airlines, Austrian Airlines, and the core German flag-carrier. The airline stressed that as a network airline, ITA Airways will actively collaborate with the Lufthansa Group to benefit from group synergies.

A joint announcement by Lufthansa and Italy’s economics ministry revealed that ITA Airways is planning to hire an additional 1,200 employees this year, which would expand its total staff number to 5,500.

Lufthansa will appoint ITA’s chief executive and one of the five board members of the Italian company. The German company also holds the option to acquire a majority stake in the future at an agreed price.

The deal concludes Italy's nearly three-year search for a private buyer for the national airline. Initial participants in the process included Delta Air Lines, Air France-KLM, and Swiss-Italian container shipping and cruise company MSC.

Thursday's agreement signifies Lufthansa's second attempt at acquiring the struggling Italian airline. In early 2022, it proposed a joint bid with MSC for a controlling stake in ITA Airways, only to be outbid in late August by a proposal from US-based private equity group Certares.

The government under former Prime Minister Mario Draghi had stated that the offer led by private equity was a better match for the Italian airline’s needs. Certares had offered to buy the controlling stake of the airline and had also established a commercial partnership with Delta Air Lines and Air France-KLM.

However, Italy’s new right-wing government, elected in October, discarded these negotiations. According to several Italian officials, the new government was more inclined towards having the airline taken over by a larger competitor rather than a private equity entity.

Stephen Furlong, an airlines analyst at Dublin’s Davy stockbrokers, described Lufthansa's move as a "helpful development" in the ongoing consolidation of Europe's airline industry. He also noted the disadvantages of the group's existing hubs — located in Brussels, Frankfurt, Munich, Vienna, and Zurich — being primarily in the North.

Furlong expressed that compared to their European counterparts, they are lacking a southern hub, particularly for the growing traffic from Africa and Latin America. He further added that a hub in Rome would provide the group with additional capacity for flights, considering the group’s main hub at Frankfurt has reached its maximum capacity.