The package of concessions Lufthansa (LH, Frankfurt International) has offered to the European Commission in its bid to obtain approval to buy a minority stake in ITA Airways (AZ, Rome Fiumicino) is likely not enough, sources have told both Reuters and the newspaper Corriere della Sera. The insiders point out that because the EU regulator has not sought competitor feedback on the proposed deal, it now faces a full-scale investigation.

The German carrier presented its submission to the commission on January 8, offering a set of remedies to allay Brussels’ competition concerns about its plan to invest EUR325 million euros (USD354 million) to acquire an initial 41% stake in loss-making ITA.

Six Lufthansa Group routes from Milan Linate (to Düsseldorf, Frankfurt International, and Stuttgart Manfred Rommel) and Rome Fiumicino (to Frankfurt, Munich, and Zurich) overlap with the Italian flag carrier. Other routes where the group and ITA would be dominant include Milan-Brussels National (95%), Rome-Brussels (74%), and Milan-Hamburg Helmut Schmidt (65%). The European Commission is also looking at the impact on transatlantic flights.

Sources told Corriere that Lufthansa offered to abandon some slots at Linate and reduce some European frequencies, but it is not prepared to give up anything on its profitable intercontinental network, which is tightly coordinated with other Star Alliance and joint venture partners.

The EU competition watchdog usually asks rivals and customers for their views as to whether the remedies offered address their concerns, the sources explained. But that has not been done in this case, even though a preliminary review of the deal is set to end on January 29, suggesting that an in-depth probe will follow - a stage that would require another 90 working days.

The European Commission has declined to comment on the concessions. An Italian government source told Corriere della Sera that a full-scale EU enquiry is expected. Lufthansa told ch-aviation that it would “not comment on this media speculation” but that it “remains in close and constructive contact with all parties involved.”