The Strategist

European Commission approves Lufthansa's deal to buy a stake in Italy's ITA Airways

07/05/2024 - 03:23

The agreement for Deutsche Lufthansa to purchase a portion of Italy's ITA Airways (formerly Alitalia) has been authorized by the European Commission.

The regulator stated that all worries regarding the danger to industry competition have been allayed by the actions pledged by the company and the Italian government.

A deal to purchase a 41% share in ITA Airways from the Italian government was reached by Lufthansa and the government last year.

The regulator's initial worries were sparked by the acquisition because, according to its preliminary evaluation, it may limit competition in passenger air travel on several short- and long-haul routes to and from Italy. Furthermore, the European Commission was concerned that the agreement might harm possibilities for competitors by further solidifying Lufthansa's position at Milan's Linate airport.

Nonetheless, the European Commission was satisfied with several concessions made by Lufthansa and the Italian government. As a result, they will need to take action to give rivals a better position on flights connecting Rome or Milan with certain airports in Central Europe.

Agreements with other carriers will also need to be finalized for the combined business to become more competitive on long-haul routes. Furthermore, for short-haul flights, Lufthansa will assign certain takeoff and landing slots at Linate Airport to other airlines.

The European Commission said in a statement that the agreement is accepted pending complete fulfillment of the specified responsibilities. The regulator will verify that every step is being implemented.