The EU Commission continues to have concerns about Lufthansa’s planned entry into the Italian airline Ita. The Commission said on Monday that it is currently of the opinion that the planned deal could restrict competition on certain routes in and out of Italy. The authority fears that customers could suffer from rising prices or poorer quality of services after the takeover. This means that the multi-million dollar project cannot initially be completed. The EU competition watchdogs had already expressed similar concerns at the end of January, which Lufthansa was obviously unable to dispel. At the time it was said that Lufthansa and Ita were in direct competition with each other with non-stop flights on some routes between Italy and Central European countries. There is only limited competition from other airlines.
Lufthansa had already made concessions in the EU antitrust proceedings, but declined to give details. Since then, the Commission says it has analyzed internal documents, asked competing airlines and obtained comments from airports and customers. The Commission maintains its view that the project could reduce competition on a certain number of short routes. The same applies to certain long-haul connections between Italy and the USA as well as Canada and Japan. Lufthansa now has time to respond to the concerns and suggest possible remedies. The company announced in Frankfurt that it would promptly present a concept for concessions to the EU authorities in order to address remaining concerns.
“We are continuing to work 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 as part of the Lufthansa Group,” said the German airline. They remain confident that Ita will become part of the Lufthansa Group this year.
After months of negotiations, the German MDax group agreed with the Italian state at the end of May to take over a minority stake of 41 percent in the airline Ita Airways. To this end, Ita is to receive 325 million euros in equity from Lufthansa cash. In addition, according to the agreement, Lufthansa can take over a further 49 percent of the shares under certain conditions from 2025 and later the remaining 10 percent. The deal between Lufthansa and the Italian state is subject to competition law reviews at national and European levels. Italia Trasporto Aereo (Ita), founded in 2020, took over the flight operations of its insolvent predecessor Alitalia in October 2021, but is not its legal successor. However, the new airline has secured take-off and landing rights as well as the Alitalia brand. The legendary name could possibly soon be reactivated again under the new corporate umbrella.