EC Raises Concerns Over Lufthansa-ITA Airways Merger

The European Commission (EC) has raised objections to the proposed merger between Lufthansa Group and ITA Airways, citing potential harm to competition on various routes, both within and outside Italy.

Initiating a comprehensive investigation in January 2024, the EC delved into the potential impacts of the merger, scrutinizing internal documents, detailed submissions from concerned parties, and feedback from stakeholders such as competing airlines, airports, slot coordinators, and travelers.

The primary concern highlighted by the EC revolves around the reduction of competition on short-haul flights between Italy and Central Europe, where both Lufthansa and ITA Airways operate or plan to operate. Additionally, the commission expressed worries regarding competition on long-haul routes between Italy and destinations like the United States, Canada, and Japan.

One significant area of concern identified by the EC is Milan Linate Airport (LIN), where ITA Airways holds a dominant position. The merger, the EC fears, could further strengthen ITA Airways' position at LIN, potentially impeding competition from rival airlines.

In response to the EC's objections, Lufthansa Group has stated its intention to collaborate constructively with the EC.

Regarding procedural matters, the EC has issued a 'Statement of Objections' to the involved parties, outlining its competition concerns. However, this statement does not prejudge the outcome of the ongoing investigation. Lufthansa Group and the Italian Ministry of Economy and Finance (MEF) have until Apr. 26, 2024, to propose potential remedies to address these concerns.

The merger between Lufthansa Group and ITA Airways was announced in May 2023, with Lufthansa initially acquiring a 41% stake in ITA Airways.