Lufthansa’s Italian adventure is further delayed. The EU Commission wants to take a close look at the competition law consequences of the planned entry into Ita.
The EU competition authorities have initially blocked Lufthansa from joining the Italian state airline Ita. A preliminary investigation has shown that the merger could reduce competition on some short and long routes, the EU Commission said on Tuesday. According to her own information, she now wants to make a decision in an extended, open-ended review by June 6th at the latest.
The inspectors also want to take a look at long-haul flights from companies with which Lufthansa has entered into joint ventures. These are United Airlines and Air Canada over the North Atlantic. Connections from Italy to India and Japan will also be investigated. When it comes to European flights from Italy, Lufthansa and Ita are only under limited competitive pressure, as low-cost airlines such as Ryanair often operate from more remote airports.
Lufthansa is determined to complete the takeover
Brussels officials fear Lufthansa and Ita could jointly create a dominant position at Milan Linate Airport. Lufthansa had already offered to give up some take-off and landing rights there. The Commission described the concessions as “neither comprehensive enough nor sufficiently effective”. It was therefore not even presented to Lufthansa’s competitors for comment.
Lufthansa continues to stick to its planned entry into Ita. The MDax group announced on Tuesday that it would work hard to complete the audit quickly and to subsequently implement the investment. It is still assumed that the transaction will be approved. According to Lufthansa, Ita Airways should become a complementary and important part of the Lufthansa Group.
The takeover is strategically extremely important for Lufthansa boss Carsten Spohr. They would gradually take over the state carrier of the third-largest EU economy, break another airline out of the “Sky Team” alliance dominated by Air France and gain access to a billion-dollar market.
Spohr likes to describe Ita, which has shrunk from its legendary loss-making predecessor Alitalia, as a start-up in a medium development phase that can quickly be made profitable. After Austrian, Swiss and Brussels Airlines, Ita would be the fourth state airline from a neighboring country to end up in the Lufthansa Group in a privatized form.
After months of negotiations, the German MDax group agreed with the Italian state at the end of May 2023 to take over a minority stake of 41 percent in the airline Ita Airways. For this purpose, Ita is to receive 325 million euros in equity from Lufthansa cash. In addition, according to the agreement, Lufthansa can take over a further 49 percent of the shares under certain conditions from 2025 and possibly the remaining 10 percent later.
Italia Trasporto Aereo (Ita), founded in 2020, took over the flight operations of its insolvent predecessor Alitalia in October 2021, but is not its legal successor. However, the new airline has secured take-off and landing rights as well as the Alitalia brand. The legendary name could possibly soon be reactivated again under the new corporate umbrella.
Source: Stern
