ITA and Lufthansa planes

ITA and Lufthansa need to do more before EC agrees merger

Business News Travel & Tourism

The latest commitments offered by ITA and Lufthansa to gain approval for their merger still fall short of satisfying the European Commission. However, there is time until the final decision on 4th July for enhancements to be made in order to receive the green light.

Describing the merger between the Italian and German airlines as a “complex” case, sources highlighted discussions between EC Vice President and Competition Commissioner Margrethe Vestager and Economy Minister Giancarlo Giorgetti. They say progress is still possible based on the willingness of both parties to reach a mutually acceptable agreement.

Last Tuesday, the Italian economy ministry announced that ITA and Lufthansa had submitted the remedies requested by the European Commission to secure approval for Lufthansa’s acquisition of a 41% stake in Italy’s ITA Airways. The EU regulatory body has raised concerns about competition issues related to the acquisition.

The Italian Treasury owns ITA, replacing the financially troubled former flag-carrier Alitalia in 2021.

Fair Competition Concerns

The focus of scrutiny from Brussels includes 39 short-haul routes connecting Italy with Central Europe, the US, Canada, and Japan, as well as the potential for a dominant position at Milan’s Linate airport.

The primary remedies proposed by the two airlines involve ITA and Lufthansa agreeing to relinquish 11 pairs of slots (22 arrivals and departures) at Milan-Linate to competitors, including the low-cost carrier Easyjet.

Additionally, they would freeze their alliance for two years on international routes from Fiumicino to the United States and Canada, operating as temporary competitors during this period.

The EU Commission will carefully evaluate the new commitments aimed at addressing the initial competition concerns raised by the merger, a Commission spokeswoman stated on Tuesday. The Commission has extended the deadline for a decision on the operation from 15th June 15 to 4th July.

Leave a Reply