The European Commission has warned Lufthansa Group that its intention to acquire a 41% stake in ITA Airways (AZ, Rome Fiumicino) could harm competition and increase prices. However, the group told ch-aviation it will shortly submit “a concept of remedies to the authority in order to address any remaining concerns.”
As a result of its in-depth investigation, the commission said it believes the merger transaction could reduce competition on a certain number of short-haul routes connecting Italy with countries in Central Europe; lessen competition on long-haul routes between Italy and the United States, Canada, and Japan; and bolster ITA’s dominant position at Milan Linate.
The Lufthansa (LH, Frankfurt International) parent will now analyse the concerns the European Commission has presented with the aim of discussing them with the regulator. It told ch-aviation: “We keep on working towards a timely approval of the transaction - also because we are convinced that competition in Europe, especially in Italy, will be strengthened by ITA Airways being part of Lufthansa Group.” It added that it “will not comment on the details of the confidential proceedings or on the Statement of Objections submitted” from Brussels.
It is widely expected that Lufthansa could surrender a number of routes and slots, particularly at Linate, where ITA is the top player with 52.3% of capacity by weekly seats. Several airlines, most recently easyJet, are lining up with an interest in taking over any vacancies at the Italian hub. The deadline for Lufthansa Group to submit its suggestions for remedies to gain approval of the deal currently falls on April 26.
ch-aviation has reached out to ITA Airways for comment.
Europe is currently seeing two planned moves for major consolidation in the airline industry, the other being IAG International Airlines Group’s proposed acquisition of Air Europa (UX, Palma de Mallorca) through its Spanish subsidiary Iberia (IB, Madrid Barajas).
