The European Union (EU) is throwing a wrench into the proposed deal between German airline giant Lufthansa and Italy's ITA Airways. The European Commission, the EU's antitrust watchdog, expressed concerns that the partnership could stifle competition and lead to higher airfare prices for travelers. Lufthansa's bid to acquire a 41% stake in ITA Airways has been met with resistance from the EU. The Commission fears the deal could have negative consequences on several fronts.
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Firstly, the combined entity could dominate short-haul routes between Italy and Central European countries. This raises concerns about reduced options and potentially inflated prices for travelers on these routes. Secondly, the deal could impact long-haul flights from Italy to destinations like the US, Canada, and Japan. The EU worries that with less competition, Lufthansa could dictate airfare on these routes. Thirdly, the deal strengthens ITA's hold on Milan's main airport, Malpensa. This could make it harder for other airlines to gain access to the airport, further limiting competition.
The EU has issued a "statement of objections" to Lufthansa, outlining these concerns. This essentially puts the ball in Lufthansa's court. The German airline will now have to propose concessions and remedies to address the EU's competition worries. Lufthansa has expressed confidence in its ability to find solutions that satisfy the EU. They believe the deal will ultimately strengthen competition within the European aviation sector. However, they haven't yet revealed the specific concessions they plan to offer. The timeline for this process is tight. The EU has given Lufthansa until April 26th to respond to their concerns. If Lufthansa fails to propose satisfactory remedies, the EU could block the deal altogether.
This development casts a shadow of uncertainty over the future of the partnership. While Lufthansa remains optimistic, the EU's stance highlights the potential negative impact the deal could have on competition and consumer choice. The coming weeks will be crucial as Lufthansa scrambles to find a solution that appeases both the EU and secures their stake in ITA Airways.