EU gave green light to the acquisition of stake in ITA Airways by Lufthansa, subject to conditions

Brussels –Green light to the Ita-Lufthansa merger: the European Commission lifted its reservations one day ahead of schedule, announcing the go-ahead for the takeover of the Italian company by the Germans. However, the green light is conditional on implementing remedies the Cologne-based carrier proposed: specifically, the sale of routes from and to North America, particularly over the United States, and the reduction of the presence at Milan Malpensa. In this sense, Lufthansa and Ita’s shareholder, namely the Ministry of Economy, commit to guaranteeing one of the companies access to Ita’s national network to offer indirect connections between some central European airports and some Italian cities other than Rome and Milan.

The approval granted today (July 3) by the European Commission concerns 41 percent of the share package of the Italian flag carrier. The merger proposal envisages an initial transfer of part of the shares, and the possibility for the German side to acquire the remaining part from the Treasury at a later date. Thus, Ita “will initially remain a State participation”, stressed the Minister of Economy, Giancarlo Giorgetti, in the press conference held for the occasion. Ita “will remain Italian at heart, if not in ownership, because in any case it is also in Lufthansa’s interest to develop the Italian market and tourism leisure, but also the Italian economy”, he added. Then the Italian minister insisted on a point he consider key in this operation: “ITA was created to put an end to state aid. Now it will no longer need state cars”.

Competition Commissioner Margrethe Vestager expressed satisfaction. “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 executive Vice President said, convinced that “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.”

While for operators and EU antitrust, this is the end of the story, and with a happy ending, for competitors, it is not. According to Wizzair’s CEO, József Varàdi, the remedies proposed to allow the merger are not enough. He also announced his intention to challenge the Commission’s decision by appealing to the EU Court of Justice. The case, therefore, may not be resolved, and the Ita-Lufthansa dossier is likely to be reopened.