European Commission Expresses Concern Over Lufthansa’s Stake Acquisition in ITA Airways

The European Commission has raised competitive concerns regarding Lufthansa Group’s proposal to acquire a 41% stake in ITA Airways, citing potential adverse effects on competition and the risk of increased prices. The Commission’s in-depth investigation highlights apprehensions about the transaction’s impact on several key routes between Italy and Central Europe, as well as long-haul flights from Italy to the United States, Canada, and Japan. Additionally, there are worries that the deal could further strengthen ITA Airways’ already dominant position at Milan Linate Airport.

In response, Lufthansa Group has announced plans to submit a package of remedies to the European Commission aimed at addressing these concerns. The Group remains optimistic about securing timely approval for the transaction, emphasizing the competitive benefits it believes will result from incorporating ITA Airways into its operations. Despite the detailed nature of these proceedings, Lufthansa has refrained from commenting on the specifics of the Statement of Objections issued by the Commission.

One anticipated solution could involve Lufthansa relinquishing a number of slots and routes, especially at Milan Linate, where ITA Airways currently leads with a 52.3% share of capacity by weekly seats. This potential slot divestiture has attracted interest from other airlines, including easyJet, eager to capitalize on any opportunities that may arise from this regulatory scrutiny.

The deadline for Lufthansa Group to present its proposed remedies to the European Commission is set for April 26. Meanwhile, ITA Airways has yet to comment on the ongoing discussions.

This case represents one of two significant consolidation efforts currently under scrutiny in the European airline industry, alongside IAG International Airlines Group’s bid to acquire Air Europa through its subsidiary Iberia. The outcome of these cases will likely have far-reaching implications for competition and market dynamics within Europe’s aviation sector.