Italy and Lufthansa signed a deal Thursday for the German company to buy "a minority stake" in ITA Airways, which rose from the ashes of state-owned Alitalia, the Italian government said.
The accord is big news for Italy, which has had to spend more than €13 billion over the years trying to get the national airline back on its feet.
Lufthansa submitted an offer in mid-January to acquire an initial minority stake of up to 40% in the Italian airline.
The deal was finalised in Rome between its chief executive Carsten Spohr and Italian Finance Minister Giancarlo Giorgetti.
It will see Lufthansa "take over a minority stake, after having already shared the company's business plan, which envisages a revenue growth of €2.5 billion expected this year and €4.1 billion forecast for 2027", the finance ministry said in a note.
It did not quantify the size of the stake.
"These results will allow for the growth and renewal of the fleet," said the statement, citing 94 planes at the end of 2027 versus the current 71.
ITA's workforce, planned to hit 4,300 after hiring this year, will grow to more than 5,500 at the end of the plan, it said.
"ITA Airways' strategy is to establish itself as a leading full-service carrier in the three sectors of intercontinental, international and domestic, with a focus on long-haul traffic," it added.
Alitalia, which was placed under public administration in 2017, accumulated losses of €11.4 billion between 2000 and 2020.
It was eventually shut down in October 2021, leaving the runway clear for ITA Airways.
ITA launched in a market struggling to recover from the turbulence of the coronavirus pandemic, but Brussels gave the state a green light for a €1.35-billion injection to help it take to the skies.