EU Objects to Lufthansa’s Planned ITA Airways Takeover – Airways | Airlines

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DALLAS — The European Commission has informed Lufthansa (LH) and the Italian Ministry of Economy and Finance that their proposed ITA Airways (AZ) acquisition could restrict competition on inbound and outbound routes from Italy.

In the statement of objections sent as part of the in-depth investigation of the LH takeover, the EU Commission states that the transaction may cause customers to face an increase in prices or a decrease in service quality.

Specifically, the Commission thinks LH’s gradual acquisition of control of AZ could hinder competition at Milan Linate Airport (LIN), the city airport of Lombardy’s capital, and on specific routes connecting Italy with Central Europe, North America, and Japan.

Lufthansa and the Italian Ministry of Economy and Finance have until April 26, 2024, to present “remedies” to the competition concerns listed in the statement of objections to the European Commission.

EI-IFE ITA Airways A350-941. Photo: Francesco Cecchetti/Airways. 48 / 25,000. Photo: Francesco Cecchetti/Airways

Antitrust Concerns

The EU executive said the Italo-German integration could “reduce competition on several short-haul routes connecting Italy with Central European countries.” On these routes, Lufthansa and Ita “compete head-to-head mainly with direct and indirect flights. Competition on these routes appears limited and mainly comes from low-cost carriers, such as Ryanair [FR], which often operate from more remote airports.”

Furthermore, merging the Italian and German carriers could “reduce competition on several long-haul routes between Italy and the United States, Canada, and Japan. On these routes, ITA on one side and Lufthansa and its joint venture partners on the other compete head-to-head with direct or indirect flights: competition from other airlines appears insufficient.”

In its assessment, the Commission considers the activities of AZ, LH, and its joint venture partners to be those of a single…

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