EU Antitrust Regulators Warn of Reduced Competition
BRUSSELS – Lufthansa’s bid for a minority stake in ITA Airways has drawn warnings from EU antitrust regulators about potential reduced competition in flights to and from Italy. The German carrier is seeking to acquire a 41% stake in the state-owned Italian airline as part of a capital increase. However, the European Commission has opened an in-depth investigation, citing concerns that the deal could diminish competition in passenger air transport services on various short-haul and long-haul routes.
The investigation will specifically focus on the impact of the merger on routes connecting Italy with countries in Central Europe, as well as long-haul routes to the United States, Canada, Japan, and India. Regulators will also assess whether ITA, together with Lufthansa and its joint venture partners United Airlines and Air Canada, should be treated as a single entity following the merger.
Concessions Sought, Potential Market Opportunities for Ryanair
Additionally, the European watchdog has expressed concerns over ITA’s potential dominant position at Milan Linate airport. Ryanair CEO Michael O’Leary, speaking during a visit to Italy, suggested that his airline could take advantage of this situation by taking over some of the airport slots that ITA and Lufthansa may need to surrender.
In response to the investigation, Lufthansa has pledged to work closely and constructively with the Commission. They remain confident that the deal will ultimately be approved. EU antitrust chief Margrethe Vestager emphasized the need to ensure that the acquisition of ITA does not result in reduced competition, higher prices, or lower quality services for air passengers traveling to and from Italy.
The European Commission aims to deliver its verdict before the June 6 deadline, allowing for a decision to be reached ahead of the peak summer travel season.