Lufthansa-Ita Merger in EU Spotlight: Antitrust Concerns and Competition Debate

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

The EU Commission is set to release a statement on the purchase of Ita by Lufthansa in the coming days, possibly as early as next week. This comes after an antitrust investigation into the operation, which began on 23 January, is set to conclude on 6 June. There have been discussions 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.

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. Ryanair’s CEO, Michael O’Leary, 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.

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 expressed frustration with the lengthy process and urged EU institutions to move forward with approval. Both Lufthansa’s CEO Carsten Spohr and EU Competition Commissioner Margrethe Vestager have expressed optimism about progress despite some delays.

Overall, it remains uncertain whether or not this deal will go through. Any objections from the EU Commission will need to be addressed by both companies before final approval can be given. Additionally, concerns around potential monopolies and competition in the European aviation sector must also be addressed before this deal can proceed smoothly.

The fate of Ita rests largely on how well Lufthansa responds to any objections raised by Brussels and whether they can address concerns around potential monopolies and competition in Europe’s aviation sector.

In recent weeks there has been growing pressure from low-cost carriers such as Ryanair who are worried about losing market share if Lufthansa gains too much power in Italy’s air travel industry.

Italian Minister of Economy Giancarlo Giorgetti has called for quick action from Brussels so that he can move forward with plans for economic growth.

As we wait for a decision from Brussels we can only hope that both parties involved come to an agreement that benefits everyone involved without creating any negative consequences for consumers or competitors in Europe’s aviation industry.

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