Francesca Landini and Elisa Azolin, Jonathan Saul

LONDON/MILAN – Aristotle Onassis, the founder of Greece’s Olympic Airways was sixty-five. A new shipping entrepreneur, Gianluigi Aponte, has his sights set on Alitalia’s successor.

After building his ship-based shipping empire, the 81 year-old is now known as “the captain”. He hopes to establish an air freight and passenger operation that can be integrated with MSC’s maritime cargo and cruise operations.

However, there are many challenges.

Alitalia was in trouble for many years. The Italian government spent an estimated 10 million euros (11 billion dollars) to rescue the airline before it’s slimmed down relaunch last year as ITA Airways.

This means Rome will monitor all deals closely.

It is possible for something that looks great on paper to not work in reality.

Peter Sand, Chief Analyst at Xeneta’s air and ocean freight rate benchmarking platform Xeneta said that “ocean freight and air freight” are two types of cargo transports.

It doesn’t make sense from a business standpoint. MSC operates a cruise company, but the synergies they might reap by buying former Alitalia aren’t that great.

MSC’s strengths are its scale and resourcefulness.

    A global supply chain crunch has led to record, multibillion-dollar profits for the world’s biggest shipping lines such as privately owned MSC, giving them the firepower to think longer term about how to grow their businesses.

‘TRANSFORMATIONAL TRANSACTION’

MSC is also called Mediterranean Shipping Company. It’s currently the number one container shipping line in the world. Maersk has been able to catch up with MSC in terms of container shipping capacity. The No. The No.3 cruise liner in the world and is expected to be the second largest by 2025.  

MSC offered Vincent Bollore’s African logistics company a 5.7 million euro bid in December. This made an offer for ITA seem small.

MSC, which is based in Switzerland, will likely bid between 1.2 to1.6 billion euro for ITA. A trade source spoke to Reuters on condition that anonymity.

Additionally, it has partnered with Lufthansa in Germany as an airline partner.

The two companies stated last month that they would like to purchase a majority stake in ITA. They requested a 90-day exclusivity period to review the offer.

According to a trade source, MSC wanted to acquire Lufthansa in order to be a commercial operator. MSC would only have a minor stake in ITA. MSC would then finance the entire purchase.

MSC will use its position in logistics and ports to ship cargo, as well as its passengers cruise and travel business, to build a platform that can attract more customers and grow passenger and cargo aviation trade.

Source said that the transaction was intended to be transformational (for MSC), and it’s not only about the passenger business. It is anticipated that the cargo logistics company will provide immediate value.

An added benefit is the reputation of being known as the airline that flew to the Pope.

Lufthansa hopes the agreement will increase its passenger flight market in Italy and provide more flights to other European hubs. The expansion could also include Lufthansa Cargo, its freight subsidiary.

Lufthansa did not respond to our request for comment.

HEAD TO HEAD

The Italian government responded so far cautiously.

A government source said to Reuters that the Treasury would like to know if any other potential buyers exist for ITA before it makes a decision regarding exclusive talks.

On Friday, Economy Minister Daniele Franco officially started the search for a partner in ITA. He stated that the government would retain a minority stake at first.

ITA was founded on October 15. It has its headquarters at Rome’s Fiumicino Airport and a majority of the take-off/landing rights at Milan’s Linate airport. The company has 52 planes, which is less than Alitalia, with four cargo aircraft. It employs approximately 2,300 people, as opposed to nearly 11,000 Alitalia employees in 2019.

MSC could be competing with container companies such as Denmark’s Maersk. MSC bought Senator International, an air freight company, last year in order to boost its air cargo operations.

    France’s CMA CGM, the world’s No. Last year, 3 Container Line launched their own air cargo service.

Aponte is a media shyy, and does not have the fame of Onassis.

MSC made an unanticipated hire in 2019: Soren Toft, a Maersk employee, was appointed MSC’s chief executives in December 2020. He will work with Aponte senior, and Diego Aponte who are the group’s president.

A shipping source stated that they realized the need to grow and expand their business and therefore needed outside help.

“At the exact same time, all stops and ends with the family.”

Gianluigi Aponte isn’t the first to make a bid for ITA.

He was part of an 2008 private consortium which hoped to purchase Alitalia. However, he quit the project several months later, partly due to a lack of an industrial strategy.

Other shipping-related people have ventured into airline business. Stelios Haj-Ioannou is a descendant of shipowners and founded the budget airline easyJet in Lon: 1995.

Hapag Lloyd, a German container liner, has decided not to enter air freight.

Rolf Habben Jansen (Hapag) stated that the company is not an expert on this subject and that many customers will separate their sea and air freight.

“I don’t disagree with their strategy, but we decided not to enter that.”

($1 = 0.8782 euros)