EU Gives Green Light for Lufthansa-ITA Airways Deal

Photo source: Lufthansa Group

The European Commission on Wednesday approved Lufthansa Group’s proposed acquisition of a minority stake in Italy’s ITA Airways, subject to conditions.

Announced in May 2023, the deal will see Lufthansa Group acquire a 41 percent stake in ITA Airways for 325 million euros.

The transaction is expected to close in the fourth quarter of 2024. Options for the acquisition of the remaining shares in ITA Airways have been agreed between Lufthansa Group and the Italian Ministry of Economy and Finance (MEF) and can be exercised from 2025 at the earliest.

Photo source: Lufthansa Group

The EU’s decision follows an in-depth investigation of the proposed transaction, as the Commission had concerns that the transaction would reduce competition on certain short-haul and long-haul routes and create or strengthen ITA’s dominant position at the Milan-Linate airport.

To seal the deal, Lufthansa and ITA Airways agreed:

– to make available to one or two rival airlines the necessary assets to enable them to start non-stop flights between Rome or Milan and certain airports in Central Europe,
– to enter into agreements with rivals to improve their competitiveness on the long-haul routes of concern, for instance through interlining agreements or slot swaps,
– to transfer take-off and landing slots at Linate airport to the remedy takers for the short-haul routes.

“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,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

ITA Airways (right) will enter Lufthansa Group which includes the airlines of Lufthansa, SWISS, Austrian, Brussels and Eurowings. Source: Lufthansa Group

Following the closing of the deal, ITA Airways is to become the fifth network airline to be closely integrated with Lufthansa Group while keeping its brand name ITA Airways.

Moreover, Rome-Fiumicino will become the Lufthansa Group’s sixth and geographically southernmost hub.

Immediately after the closing, the route networks of both companies are to be linked with each other through code sharing so that customers can combine the airlines’ offers.

According to Lufthansa, this will create over 1,000 new transfer options, creating many more options to destinations in South America, North Africa and the Middle East in particular.