EU wants stronger antitrust remedies from Lufthansa
German airline’s bid for 41% stake in ITA highlights the aviation industry’s attempts to consolidate
25 March 2024 - 14:00
byFoo Yun Chee and Inti Landauro
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A Lufthansa plane stands parked as Frankfurt airport. Picture: REUTERS/KAI PFAFFENBACH
Brussels — Lufthansa’s bid for a minority stake in Italian rival ITA Airways could harm competition and lead to higher prices, EU antitrust regulators said on Monday, ramping up pressure on the German carrier to come up with stronger remedies.
The European Commission said the deal threatened competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes between Italy and the US, Canada and Japan. It would also strengthen ITA’s dominant position at Milan’s main airport.
“The removal of ITA as an independent airline may have negative effects on competition in these already concentrated markets,” the commission said in a statement.
“The routes giving rise to potential concerns represent a small share of total short- and long-haul routes and passengers served by both parties and their joint venture partners, and the potential concerns do not affect the vast majority of routes that ITA operates,” it added.
The statement confirmed a Reuters story earlier in March. Lufthansa and the Italian government can now put forward new remedies by April 26.
Lufthansa wants to buy a 41% stake in state-owned ITA for €325m as part of a capital increase.
The deal highlights the airline industry’s attempts to consolidate, with British Airways owner IAG seeking to buy out Spain’s Air Europa.
The German group said it would present remedies to the commission “in a timely manner”, adding that in the company’s view the deal would strengthen competition in Europe and in Italy.
“We remain confident that ITA will become part of the Lufthansa group family this year,” it said in a statement.
Lufthansa’s remedies to address EU concerns could be similar to those in a Korean airline deal approved by the commission which included ceding slots, traffic rights and planes to a rival, a person with direct knowledge of the deal has previously told Reuters.
Before allowing airlines to close deals, regulators also want to ensure that the rival acquiring such assets would start using them almost immediately.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
EU wants stronger antitrust remedies from Lufthansa
German airline’s bid for 41% stake in ITA highlights the aviation industry’s attempts to consolidate
Brussels — Lufthansa’s bid for a minority stake in Italian rival ITA Airways could harm competition and lead to higher prices, EU antitrust regulators said on Monday, ramping up pressure on the German carrier to come up with stronger remedies.
The European Commission said the deal threatened competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes between Italy and the US, Canada and Japan. It would also strengthen ITA’s dominant position at Milan’s main airport.
“The removal of ITA as an independent airline may have negative effects on competition in these already concentrated markets,” the commission said in a statement.
“The routes giving rise to potential concerns represent a small share of total short- and long-haul routes and passengers served by both parties and their joint venture partners, and the potential concerns do not affect the vast majority of routes that ITA operates,” it added.
The statement confirmed a Reuters story earlier in March. Lufthansa and the Italian government can now put forward new remedies by April 26.
Lufthansa wants to buy a 41% stake in state-owned ITA for €325m as part of a capital increase.
The deal highlights the airline industry’s attempts to consolidate, with British Airways owner IAG seeking to buy out Spain’s Air Europa.
The German group said it would present remedies to the commission “in a timely manner”, adding that in the company’s view the deal would strengthen competition in Europe and in Italy.
“We remain confident that ITA will become part of the Lufthansa group family this year,” it said in a statement.
Lufthansa’s remedies to address EU concerns could be similar to those in a Korean airline deal approved by the commission which included ceding slots, traffic rights and planes to a rival, a person with direct knowledge of the deal has previously told Reuters.
Before allowing airlines to close deals, regulators also want to ensure that the rival acquiring such assets would start using them almost immediately.
Reuters
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