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Lufthansa takeover of Italy's ITA cleared by Brussels

July 3, 2024

The EU's competition watchdog said it was satisfied that a "sufficient level of competitive pressure remains."

ITA and Lufthansa aircraft parked at Palermo airport
The approval from Brussels comes after regulators said they were satisfied that there was enough competitive pressure remaining in the marketImage: Alberto Lo Bianco/dpa/picture alliance

The European Commission on Wednesday said it approved German national carrier Lufthansa's plans to acquire joint control of Italy's ITA Airways for €325 million ($349.6 million).

"The approval is conditional upon full compliance with the remedies offered by Lufthansa" as well as by the Italian Economy and Finance Ministry, the Commission said in a statement.

"Whilst ITA is performing well today, ITA's long-term sustainability as a stand-alone carrier would have remained highly uncertain absent the transaction," the Commission added.

Competition concerns assessed

Margrethe Vestager, the Commission's executive vice-president in charge of competition policy, said concerns over whether the acquisition would negatively affect competition had been addressed by Lufthansa and Italian officials.

The alternative for connections between Italy and the lucrative central European region was only limited competition from Ryanair, the Commission said. 

To ease EU regulators' concerns, Lufthansa and the Italian government agreed to facilitate the operation of short-haul flights by rival airlines to Central Europe and share landing slots at Milan airport to reduce Lufthansa's potential domination.

"The package of remedies proposed by Lufthansa and the MEF on this cross-border deal fully addresses our competition concerns by ensuring that a sufficient level of competitive pressure remains on all relevant routes, Vestager said.

Lufthansa CEO Carsten Spohr, said in a statement: "The approval from Brussels is excellent news for ITA Airways and Lufthansa and especially for all passengers flying to and from Italy."

"The decision is also a clear signal for strong air traffic in Europe, which can successfully assert itself in global competition," Spohr went on to say. 

Italy's economy minister welcomes move

"This positive conclusion is truly a success," Italy's Economy Minister Giancarlo Giorgetti told a press conference in Rome. "It is a big Italian success, it is a big German success, it is a big European success."

ITA was formed in 2020 following the restructuring of failed national carrier Alitalia. Last May, Lufthansa agreed to a minority stake of 41% of ITA with the Italian government.

Under certain conditions, the German carrier will then acquire an additional 49% of ITA shares starting from 2025. It may also gain control of the remaining 10% at a later date

kb/sms (dpa, AFP)