Lufthansa Offers Concessions for ITA Airways Investment Amid EU Scrutiny
Lufthansa, the German flagship carrier, has proposed concessions to address the European Commission’s competition concerns regarding its planned investment in ITA Airways, Italy’s state-owned airline. The investment involves Lufthansa acquiring a 41% stake in ITA Airways for EUR 325 million (USD 355 million), as reported by Bloomberg and Reuters.
On January 9, it was reported that Lufthansa submitted its proposal to the European Commission, ahead of the January 15 deadline set for a preliminary assessment of the deal. The European Commission’s decision will either be an approval of the acquisition or the initiation of a four-month investigation.
Sources familiar with the matter, while remaining anonymous, informed Bloomberg of Lufthansa’s concessions in its proposal, although the specifics were not disclosed. Reuters quoted a European Commission spokesperson who confirmed that Lufthansa had proposed remedies to alleviate the Commission’s concerns. However, details of these commitments were not provided.
The sources also indicated that Lufthansa might be willing to relinquish some slots, particularly at Milan Linate Airport, where ITA Airways has a strong presence. This would be particularly relevant for routes overlapping with Lufthansa Group’s hubs in Frankfurt International, Munich, Vienna, and Zurich. Lufthansa, however, has not commented on this matter.
The Italian government, which owns ITA Airways, is in favor of the deal. Italian Prime Minister Giorgia Meloni expressed frustration in September over the European Commission’s delay in addressing the proposal, highlighting the Commission’s previous insistence on finding a solution for ITA Airways.
In related news, Alitalia, ITA Airways’ predecessor, has returned EUR 100 million (USD 109 million) to the Italian state. This sum corresponds to a loan given in 2021 to ensure the continuation of flights in Italy during the pandemic. The interest on this loan will be returned later. As reported by Corriere della Sera on January 8, Alitalia, despite ceasing operations, continued to provide services and dispose of assets, achieving a significant operating margin each quarter.