Lufthansa’s Acquisition of Ita on the Brink: EU Commission to Approve Operation Amid Potential Monopoly Concerns

Ita and Lufthansa’s marriage set to face challenges in Brussels

Lufthansa’s acquisition of Ita is set to be approved by the EU Commission in the coming days, potentially as early as next week. The antitrust investigation into the operation began on 23 January and is set to conclude on 6 June. There has been discussion around possible objections that could be raised by EU institutions, particularly concerning the potential monopoly position that may be established on certain routes due to Lufthansa’s existing portfolio of airlines.

Ryanair’s CEO, Michael O’Leary, has suggested that the European Commission should approve the operation on the condition that 30% of Fiumicino’s slots are relinquished and distributed among other airlines to ensure real competition. Low-cost carriers have been eagerly waiting to see if Lufthansa and Ita will be required to sell off some valuable slots at major Italian airports such as Fiumicino and Linate if the merger is approved.

The agreement between the Italian Ministry of Economy and Finance (Mef) and Lufthansa for the sale of an initial 41% stake in Ita for 325 million euros was made almost a year ago, in May 2023. The Minister of Economy, Giancarlo Giorgetti, has voiced frustration with the lengthy process and urged the EU institutions to move forward with the approval. Both Lufthansa’s CEO, Carsten Spohr, and the EU Competition Commissioner, Margrethe Vestager, have expressed optimism about the progress of the acquisition despite some delays.

Overall, it remains uncertain how much control Lufthansa will have over Ita after acquiring it fully. The fate of this deal rests on how both companies respond to any objections from EU institutions and whether they can address concerns around potential monopolies and competition in European aviation sector.

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