The European Commission has approved Lufthansa Group’s proposed acquisition of Italian flag carrier ITA Airlines following a “thorough investigation” by EU antitrust authorities.
The deal, first announced in May 2023, will see the European aviation giant acquire a 41% stake in ITA Airlines for €325 million, with an option to acquire the remaining stake from 2025.
The long-awaited go-ahead from Europe’s competition authorities came after Lufthansa and the Italian government made several concessions following concerns the deal could lead to higher airfares and a “deterioration in the quality” of air services to and from Italy.
European Commission Vice-President Margrethe Vestager said: “The rescue package proposed by Lufthansa and the MEF is [the Italian Ministry of Economy and Finance] This cross-border transaction ensures that sufficient levels of competitive pressure are maintained on all relevant routes and fully addresses our competition concerns.”
To secure the deal, Lufthansa and ITA agreed to transfer slots at Milan Linate airport to short-haul rival airlines and allow one or two rival airlines to start direct flights between Rome or Milan and certain hubs in Central Europe.
Lufthansa CEO Carsten Spohr said the EU’s decision sent “a clear signal that Europe’s air traffic is growing and able to assert itself successfully in global competition.”
The airline group said in a statement that it now plans to “rapidly integrate” ITA Airlines and its 5,000 employees and have it join the Lufthansa Group, alongside Austrian Airlines, Swissair, Brussels Airlines and Eurowings.
Rome Fiumicino will become the group’s sixth hub and, once closed, the two airlines will share routes through codeshares. The Italian airline will also join the group’s Miles & More loyalty program and be able to tap into the group’s capabilities for purchasing aircraft and fuel, Lufthansa said.
Lufthansa Group also said the acquisition would “strengthen competition in Italy, a market currently dominated by low-cost airlines.”
The transaction is expected to close in the fourth quarter of 2024, subject to approval by non-EU competition authorities.
Meanwhile, the European Commission is also investigating British Airways parent IAG’s proposed takeover of Air Europa, as well as Air France-KLM’s proposed acquisition of a 19.9 percent stake in Scandinavian airline SAS.
