EU Approves Lufthansa's Stake in ITA Airways, But With Conditions
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The European Commission has conditionally approved Lufthansa's acquisition of a 41% stake in Italy’s ITA Airways, the successor to Alitalia. The deal, finalized in May 2023, includes an option for Lufthansa to increase its stake to 100%.
This approval follows concerns raised by the European Commission regarding reduced competition on specific routes. To address these issues, Lufthansa and the Italian government proposed corrective measures, such as:
- Providing resources to rival airlines to establish direct flights between Rome or Milan and key Central European airports.
- Transferring takeoff and landing slots (slots) at Milan's airport to competing airlines.
- Committing to agreements that enhance competition on long-haul routes connecting Italy to destinations like the US, Canada, Japan, and India.
While Italian and Lufthansa officials celebrated the announcement as a significant achievement, the European Consumer Organisation (BEUC) expressed concerns. The BEUC remains unclear on the specifics of the corrective measures and their potential impact on consumers. They worry about rising ticket prices and a decline in service quality.
ITA Airways fleet map
The 325 million euro acquisition will be executed through a capital increase, with the Italian government also injecting an additional 250 million euros into ITA Airways. This investment aims to strengthen Lufthansa's global market position while providing ITA Airways with a stable shareholder and potentially benefiting the Italian job market.
