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.
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