European Commission Approves Lufthansa’s Acquisition of ITA The European Commission has granted conditional approval for Lufthansa’s proposed acquisition of the Italian flag carrier ITA Airways. The deal, which is valued at around €2 billion, was first announced in August 2022. Conditions Imposed by the Commission To address competition concerns, the Commission has imposed a number of conditions on the merger. These conditions include: * Lufthansa must divest itself of “the slot portfolio used by ITA at London Heathrow Airport”. * Lufthansa must sell the takeoff and landing slots used by ITA at Milan Linate Airport to a suitable competitor. * Lufthansa must grant access to its passenger and cargo services on certain routes to rival airlines. The Commission believes that these conditions will ensure that competition in the European aviation market remains healthy. Lufthansa’s Plans for ITA Lufthansa has stated that it intends to integrate ITA into its network and make it a “strategic hub for Southern Europe.” The airline plans to invest in ITA’s fleet and network, and to expand its presence in key markets. Industry Reaction The merger has been welcomed by some in the industry, who believe that it will create a stronger competitor in the European aviation market. However, others have expressed concerns about the potential impact on competition and consumer choice. Next Steps The European Commission’s approval is a significant step in the process of completing the merger. The deal is now subject to regulatory approval from the Italian government. If approved, it is expected to close in the coming months.EU Approves Lufthansa’s Acquisition of ITA, Safeguarding CompetitionEU Approves Lufthansa’s Acquisition of ITA, Safeguarding Competition The European Commission has granted approval to Lufthansa’s takeover of Italy’s troubled national airline, ITA. However, the deal comes with conditions aimed at preserving competition within the industry. Investment and Control Under the agreement, Lufthansa will acquire a 41% stake in ITA for €325 million, with full control to be obtained in 2033 for a total investment of €829 million. Competition Concerns and Conditions Given Lufthansa’s significant presence in Europe, the Commission has imposed conditions to ensure continued competition. Notably, Lufthansa, ITA, and their partners control a large share of routes between Rome and Milan to North America. To address these concerns, the merged company must: * Allow rival airlines to launch non-stop flights between Rome or Milan and central European airports * Provide space for competitors on long-haul routes between Italy and the United States and Canada * Allocate slots at Milan’s Linate airport to other airlines Relief for Italian Government Finance Minister Giancarlo Giorgetti welcomed the deal as a “historic” move that frees the Italian government from the burden of subsidizing ITA. The airline has faced financial difficulties and has been through multiple bankruptcies. Giorgetti emphasized that the agreement with Lufthansa will foster the development of ITA’s routes in a manner that benefits the Italian economy. Rome’s Leonardo da Vinci Airport is expected to become a major hub for international flights.The European Commission has given conditional approval for Lufthansa’s acquisition of the Italian airline ITA. The deal will see Lufthansa take a majority stake in ITA, giving it control of the Italian carrier. However, the Commission has imposed a number of conditions on the deal to ensure that it does not harm competition in the European aviation market. These conditions include: * Lufthansa must sell its stake in Air Dolomiti, a regional airline based in Italy. * Lufthansa must provide access to its slots at certain airports to rival airlines. * Lufthansa must not engage in predatory pricing or other anti-competitive practices. The Commission said that these conditions would ensure that the deal would not “significantly impede effective competition” in the European aviation market. Lufthansa welcomed the Commission’s approval, saying that it would “allow us to create a stronger and more competitive airline group.” ITA also welcomed the approval, saying that it would “provide us with the financial stability and operational expertise we need to succeed in the competitive aviation market.” The deal is expected to close in the coming months.