It had been rumoured for some time. It appeared that the European Union's competition authorities were going to impose a temporary veto on the takeover of Italian carrier ITA by the Lufthansa group. This is indeed the case after the EU expressed its reservations about a possible reduction in competition and the creation of monopolies once the acquisition is completed.
In the wake of this, the European Commission announced that it was launching an in-depth investigation. to assess the proposed acquisition in accordance with the EU Merger Regulation. The Commission expressed preliminary reservations when the project was presented in November 2023.
Margrethe Vestager, Executive Vice-President responsible for competition policy in the EU, explained the Commission's position as follows: ". By opening an in-depth investigation, we intend to continue examining this operation. And ensure that the acquisition of a stake in ITA does not reduce competition in short- and long-haul traffic and does not lead to an increase in prices, a reduction in capacity or a decline in the quality of air transport services passengers to and from Italy" she detailed.
Less competition on Central Europe, long-haul routes and Milan-Linate
The authorities believe that this merger would significantly reduce competition on routes to Central Europe.. Brussels will also examine whether Lufthansa's purchase of ITA will have a positive impact on the airline's business. a negative impact on long-haul routes. This would involve connections between Italy and North America, Japan and India.
The Commission also points out that " the transaction could create a dominant position for ITA at Milan-Linate airport or strengthen it. This could make it more difficult for competitors to provide passenger air transport services to and from this airport." .
The Lufthansa/ITA transaction was notified to the Commission at the end of November. On 8 January this year, Lufthansa presented its commitments to return slots to its customers.. As well as to reduce its presence in markets on the verge of becoming monopolies. These undertakings are therefore deemed insufficient, " both in scope and effectiveness" stressed the European Commission. The Commission must decide on the outcome of the procedure by 6 June 2024..
For its part, the Italian Ministry of the Economy and Finance has indicated that it is hoping for a positive decision from the EU. This would support the development and growth of ITA Airways.
