EU Commission raises concerns over joint control of Ita Airways by Lufthansa and Mef

The EU’s interests in the merger between ITA and Lufthansa

The European Commission has issued a preliminary opinion regarding the acquisition of joint control of Ita Airways by Lufthansa and the Ministry of Economy and Finance (Mef). The Commission is concerned that this project could restrict competition on certain routes in the market for passenger air transport services to and from Italy, potentially leading to increased prices or decreased service quality for customers.

The Commission is particularly concerned about competition on short-haul routes connecting Italy with Central Europe, where Lufthansa and Ita compete with direct and indirect flights against low-cost carriers like Ryanair. On long-haul routes between Italy and the United States, Canada, and Japan, the Commission sees competition between Ita and Lufthansa and its joint venture partners. They operate as a single entity in the Commission’s assessment.

Ita’s dominant position at Milan-Linate airport could also create obstacles for competitors to offer air passenger transport services to and from the airport. The Commission’s goal is to ensure that this transaction does not have negative effects on customers in terms of increased costs or decreased service quality. However, they acknowledge that these concerns represent only a small percentage of the total routes and passengers served by both parties.

The next step in the investigation is the issuance of a Statement of Objections, where the Commission raises specific objections against the companies involved. Lufthansa and Mef will have an opportunity to respond to these objections, review the Commission’s findings, and propose solutions to address any concerns related to competition. They can submit remedies at any point until the appeal deadline on April 26, 2024.

While there are concerns related to competition in this transaction, there is also information contained within it regarding various unrelated products and reviews not related to the European Commission’s investigation into this matter.

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