EU: ‘Ita-Lufthansa merger may restrict competition’

Brussels – There is time until April 26 for the Ita and Lufthansa link-up: that’s the deadline set by the European Commission to dispel doubts about a deal that “may restrict competition on certain routes in the market.” The Community Executive finished the in-depth investigation launched in late January, and the result is that it sees the merger proposal as risking to “reduce competition” on too many routes. In the crosshairs are connections between Italy and Central Europe, North America (the United States and Canada), and Japan. In addition, a possible Ita-Lufthansa merger would risk “creating or strengthening ITA’s dominant position at the Milan-Linate airport, which could make it harder for rivals to provide passenger air transport services from and to Milan-Linate.”

Unless solutions are found, the transaction risks falling through, therefore. The letter with the Commission’s objections is not a rejection of the merger request filed on November 30, 2023; it is a formal step in the verification procedure initiated by the EU Antitrust Authority: a warning, in essence, allowing interested parties to decide whether and how to proceed.

“Lufthansa and MEF (Ministry of Finance, Ita’s shareholder) also have the possibility to put forward remedies to address the preliminary competition concerns identified by the Commission,” the EU executive clarifies in the statement of objections sent to Italy and Germany. The two parties may decide to submit remedies at any point in the proceedings until the appeal deadline, which expires on April 26, 2024.

From Rome, the Ministry of the Economy promptly states in a note that it ‘will continue to work on the dossier in order to present remedies for a positive solution to the issue as soon as possible’.