The European Commission has officially approved the proposed acquisition of Italian flag carrier ITA Airways by Lufthansa Group. This deal, which was announced in May 2023, will allow Lufthansa Group to acquire an initial 41% stake in ITA Airways for 325 million euros, with the option to purchase the remaining shares starting in 2025. This decision from EU antitrust regulators comes after a thorough investigation and analysis of the potential impact on the market.
In order to address concerns raised by European competition regulators, Lufthansa Group and the Italian government agreed to make certain concessions. These concessions were aimed at ensuring that the deal would not lead to increased flight prices or decreased quality of airline services to and from Italy. The European Commission’s executive vice president, Margrethe Vestager, stated that the proposed package of remedies fully addresses competition concerns by maintaining a sufficient level of competitive pressure on all relevant routes.
Upon approval, Lufthansa Group and ITA Airways will proceed with the integration process. This will involve the transfer of slots at Milan Linate Airport to a short-haul competitor and the facilitation of nonstop flights between Rome or Milan and certain hubs in Central Europe by one or two rival airlines. Lufthansa CEO Carsten Spohr expressed that the EU’s decision is indicative of a strong air traffic market in Europe, which can compete effectively on a global scale.
Following the acquisition, ITA Airways will become part of Lufthansa Group’s portfolio of airlines, which includes Lufthansa, Austrian Airlines, Swiss, Brussels Airlines, and Eurowings. Rome Fiumicino Airport will serve as the group’s sixth hub, connecting route networks through codesharing. Additionally, ITA Airways will join the group’s Miles & More loyalty program and will have access to the group’s resources for aircraft and fuel purchasing.
The European Commission’s approval of Lufthansa Group’s acquisition of ITA Airways marks a significant milestone in the aviation industry. This deal not only strengthens competition in Italy but also sets a precedent for other airline transactions currently under scrutiny by competition authorities. The transaction is expected to be finalized in the fourth quarter of 2024 pending approval from competition authorities outside the EU.