Lufthansa and the Ministry of Economy and Finance (Mef) have been informed by the European Commission of its preliminary opinion regarding the acquisition of joint control of Ita Airways. The Commission is concerned that this project could lead to a restriction in competition on certain routes in the market for passenger air transport services to and from Italy, potentially leading to increased prices or decreased service quality for customers.
The Commission is particularly concerned about competition on short-haul routes connecting Italy with Central Europe, where Lufthansa and Ita compete with direct and indirect flights, primarily against low-cost carriers like Ryanair. On long-haul routes between Italy and the United States, Canada, and Japan, the Commission sees competition between Ita and Lufthansa and its joint venture partners. They operate as a single entity in the Commission’s assessment.
Ita’s dominant position at Milan-Linate airport could also create obstacles for competitors to offer air passenger transport services to and from the airport. The Commission aims to ensure that this transaction does not negatively impact customers in terms of increased costs or decreased service quality. While these concerns represent a small percentage of the total routes and passengers served by both parties, they are still significant enough to warrant investigation by the European Union authorities.
The next step in the investigation is the issuance of a Statement of Objections, where the Commission raises specific objections against Lufthansa and Mef related to their acquisition of joint control over Ita Airways. Both parties have until April 26, 2024, to respond to these objections, review the Commission’s findings, propose solutions to address any competition concerns raised by regulators. They can submit remedies at any point during this timeframe.
While there are concerns about competition related to this acquisition project, it’s worth noting that there are other unrelated issues contained within this article that do not relate directly to it.
