ITA - Lufthansa planes at airport stands

EU issue list of remedies over Lufthansa-ITA deal

Business News

Deputy Premier and Transport Minister Matteo Salvini lamented “Euro-madness” following the European Commission’s presentation of issues regarding Lufthansa’s acquisition of stake in Italy’s ITA Airways.

Lufthansa plans to acquire a 41% stake in Italy’s ITA Airways. However, the EU is demanding their resolution to a number of issues before granting approval for the operation. The Commission opened an in-depth probe two months ago into the deal.

The Commission informed Lufthansa and the Italian economy ministry of its preliminary view on Monday, suggesting that the acquisition might restrict competition on certain routes, potentially leading to increased prices or decreased service quality for customers.

Specifically, Brussels stated its concerns about potential reduced competition on short-haul routes linking Italy with countries in Central Europe and long-haul routes between Italy and the US, Canada, and Japan.

“A risk of a competition issue is of course that prices go up and services go down,” European Union Commissioner Margrethe Vestager told reporters. “That is what we mean when we say risk to competition: that users will have to pay,” she added.

The EU has flagged competition concerns over Lufthansa’s acquisition, much to Salvini’s displeasure. “After many years were wasted, the government wants to make the jobs of thousands of workers safe, ensure Italian people’s right to fly and the arrival of tourists in Italy, and Brussels objects to it,” Salvini expressed. “In my opinion, it is because there are economic interests behind it.”

Concerns over competition on certain routes and Milan-Linate airport

The EC expressed fears that the acquisition could bolster ITA Airways’ dominant position at Milan-Linate airport, hindering competitors’ ability to provide passenger air transport services to and from the hub. These objections were outlined in an official statement by the EC, which comes after launching an in-depth investigation in mid-January into the proposed deal between Lufthansa and ITA Airways.

This examination, initiated in late November, entered phase two after the Italian Treasury and the German carrier formally notified Brussels of the merger plans, involving a €325million investment by Lufthansa into the Italian carrier, which replaced the former flag-carrier Alitalia in 2021.

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