EC sends statement of objections to ITA-Lufthansa deal

(ANSA) - ROME, MAR 25 - The European Commission (EC) has informed Lufthansa and the Italian economy ministry of its preliminary view that their proposed acquisition of joint control of ITA Airways ('ITA') may restrict competition on certain routes leading to increased prices or decreased quality of services after the transaction, according to a statement issued on Monday. Specifically, the EC says it is concerned the deal for Lufthansa to purchase a 41% stake in ITA may reduce competition on a number of short-haul routes connecting Italy with countries in Central Europe and on on a number of long-haul routes between Italy and the US, Canada and Japan.
    In addition, Brussels fears the acquisition could create or strengthen the dominant position of the Italian airline at Milan-Linate airport, making it harder for competitors to provide passenger air transport services to and from the hub.
    In January the EC launched an in-depth investigation into the proposed deal between Lufthansa and ITA Airways, taking to phase two the antitrust examination of the transaction that began in late November after the Italian Treasury, currently the sole owner of the company that replaced the loss-making former flag-carrier Alitalia in 2021, and the German carrier formally notified Brussels of the plans for the merger against an investment by the German carrier of 325 million euros.
    Earlier this month European Competition Commissioner Margrethe Vestager said the EU executive's approval of the deal is dependant on how the companies aim to resolve problems regarding routes.
    Lufthansa and the Italian economy ministry have until April 26 to reply to the EC's statement of objections and propose remedies to address its preliminary competition concerns.
    The deadline for a final decision from Brussels is currently set for June 6. (ANSA).