Summary

  • The EC has approved Lufthansa’s purchase of 41% of ITA Airways with concessions on transatlantic ventures and slot monopolies.
  • Concerns over monopolies on European routes have been addressed by Lufthansa by giving up slots at Milan Linate Airport.
  • There are also conditions to allow ITA Airways to maintain long-haul flights post-merger, including competitive markets and viable one-stop options.

The European Commission (EC) has finally approved Germany’s Lufthansa’s purchase of 41% of the Italian national airline ITA Airways. The latest announcement follows months of consideration by the EC’s competition authority since Lufthansa notified Brussels of its intention to acquire the airline in November 2023.

Lufthnsa Group will acquire the remaining 59% for a capital contribution of 325 million euros, as agreed in May 2023. The airline group states, “The investment will be completed through a capital increase. The transaction is expected to close in the fourth quarter of 2024.”

The airline group has remained steadfast in its commitment to the deal despite significant pushback from the EC over various issues.

ITA Airways Airbus A350-900 Born To Be Sustainable livery

Photo: Angel DiBilio | Shutterstock

Points of contention included the Lufthansa Group airlines’ so-called A++ Atlantic Joint Venture with Air Canada and United. Post-merger, Brussels was also worried about potential monopolies on certain routes within Europe and the transcontinental front.

EU approval

The long-awaited EU approval comes following a lengthy investigation process initiated by the Commission. Brussels was analyzing whether the Lufthansa-ITA merger would adversely affect competition within Europe. In January, it announced its decision to launch a Phase II investigation, extending its deadline for making a decision. The Commission’s first deadline for the end of the in-depth investigation was June 6, 2024. This was later extended to July 4.

Related

Alitalia Was Worthless When It Was Sold; Transaction Now Valued At -€5 Million

According to a 2021 report, Alitalia was shown to be worth less than nothing.

In a statement, Carsten Spohr, Chief Executive Officer of Deutsche Lufthansa AG, says:

“The approval from Brussels is excellent news for ITA Airways and Lufthansa and especially for all passengers flying to and from Italy. We look forward to welcoming ITA Airways and its outstanding employees as a new member of our airline family very soon. The decision is also a clear signal for strong air traffic in Europe, which can successfully assert itself in global competition.”

Long-haul routes to North America

One of the concerns initially raised by Brussels at the launch of its in-depth investigation was that of long-haul services between Italy and North America. The European Commission believed that the airlines would have a significant advantage in providing air services between the two regions. The Commission said this would be brought about thanks to “close competition between ITA, Lufthansa or Lufthansa’s joint venture partners – through non-stop or convenient one-stop connections and convenient airport locations.”

As it stands, ITA Airways offers direct flights to the following destinations in the United States and Canada.

ita-north-america routes

Photo: GCMap.com

This does not include connecting options via the Lufthansa Group’s European hubs, some of the primary ones being Frankfurt, Munich, Vienna, Brussels, and Zurich. Combined, the Lufthansa offer (once merged with ITA) is immense. It is also important to consider the group’s joint venture partners, which include United and Air Canada.

Short-haul routes and a monopoly at Milan Linate

Another issue that prolonged the approval process was that of monopolies on European routes.

Related

Europe Highlights 39 Routes Of Concern In Lufthansa – ITA Airways Merger

50% of ITA’s long-haul network poses an issue for the European Commission in light of Lufthansa’s acquisition.

Brussels felt that ITA and Lufthansa were typically the only airlines operating on flights between Italy and Central Europe, with Ryanair also competing but inevitably flying from more remote airports.

ITA Airways A320neo

Photo: ITA Airways

Lufthansa and ITA’s dominant position at the crowded Milan Linate airport was a related concern. The facility, which has very limited available slots and is the most centrally located airport in Milan, is currently an ITA base. Lufthansa Group airlines also offer services to their respective hubs.

What do you make of the European Commission’s decision? Let us know in the comments below.


  • Tom Boon-169

    Lufthansa

    Region:
    Europe

    Loyalty Program:
    Miles & More

  • ITA Airways Airbus A330 in sky

    ITA Airways

    IATA/ICAO Code:
    AZ/ITY

    Airline Type:
    Full Service Carrier

    Hub(s):
    Rome Fiumicino Airport

    Year Founded:
    2020

    Alliance:
    SkyTeam

    CEO:
    Fabio Lazzerini

    Country:
    Italy

Leave a Reply

Your email address will not be published. Required fields are marked *