EU Conditionally Approves Acquisition Of Stake In ITA Airways By Lufthansa

(RTTNews) - The European Commission on Wednesday approved the proposed acquisition of joint control of ITA Airways by Deutsche Lufthansa AG (DLAKF, DLAKY) and the Italian Ministry of Economy and Finance or MEF.

The approval is conditional upon full compliance with the remedies offered by Lufthansa and the MEF.

The Commission had concerns on reduced competition on a certain number of short-haul routes connecting Italy with countries in Central Europe and reduced competition on a limited number of long-haul routes between Italy and the US and Canada. It also creates or strengthens ITA's dominant position at the Milan-Linate airport.

The approval is based on a remedy package submitted by Lufthansa and the MEF. Lufthansa and the MEF will make available to one or two rival airlines the necessary assets to enable them to start non-stop flights between Rome or Milan and certain airports in Central Europe.

The merged company will enter into agreements with rivals to improve their competitiveness on the long-haul routes of concern, for instance through interlining agreements or slot swaps.

Lufthansa and MEF will also transfer take-off and landing slots at Linate airport to the remedy takers for the short-haul routes.

The commission said Lufthansa and the MEF can only implement the transaction following the Commission's approval of suitable remedy takers for each of the short-haul, long-haul and Milan Linate commitments. The Commission will assess the suitability of remedy takers in the context of a separate buyer approval procedure.

On January 23, 2024, the Commission opened an investigation to assess if Lufthansa's acquisition of a stake in ITA may restrict competition on certain routes in the market for passenger air transport services in and out of Italy.

The Commission is concerned that customers may face increased prices or decreased quality of services after the transaction.