EC gives green light to ITA-Lufthansa deal

The European Commission said Wednesday
that it has approved the planned merger of Lufthansa and ITA
Airways.

   
The EU executive added, however, that the green light for the
operation was conditional on the implementation of remedies to
protect competition regarding Milan's Linate airport, short-haul
routes between Italy and Central Europe, and long-haul routes
between Rome's Fiumicino airport and North America.

   
The German airline will acquire from a 41% stake in ITA from the
Italian economy ministry (MEF) through a 325-million-euro
capital increase, with the stake set to rise to 100% in a second
phase - by 2033 - for a total investment of 829 million.
The MEF currently owns ITA, the company that replaced the
loss-making former flag-carrier Alitalia in 2021.

   
The Commission approved the move after an in-depth investigation
of the proposed transaction, which included a series of
objections on competition grounds that it demanded be fixed.

   
Unions representing Lufthansa and ITA Airways employees recently
sent a joint letter to European Competition Commissioner
Margrethe Vestager calling for the operation to be given the
green light.

   
In a statement, the Commission said that, while ITA is
performing well today, its long-term sustainability as a
stand-alone carrier would have remained highly uncertain without
the transaction.

   
"At a time when consumers are facing increasingly higher prices
for air travel, it is very important to preserve competition in
the sector," said Vestager.

   
"This is why we have assessed very carefully whether the
acquisition of a controlling stake in the new Italian flag
carrier ITA by Europe's largest network carrier Lufthansa would
raise competition concerns.

   
"We needed to prevent that passengers end up paying more or end
up with fewer and lower quality air transport services on
certain routes in and out of Italy.

   
"The package of remedies proposed by Lufthansa and the MEF on
this cross-border deal fully addresses our competition concerns
by ensuring that a sufficient level of competitive pressure
remains on all relevant routes".

   

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