Lufthansa's attempt to win approval for its €325 million acquisition of a 41% stake in Italian carrier ITA Airways seems to have hit a snag. Sources familiar with the matter revealed that the German airline's latest concessions offered to the European Commission (EU) are largely similar to the ones previously rejected. The crux of the issue lies in the EU's antitrust concerns. The regulators worry that the deal would significantly reduce competition on certain routes, particularly those between Italy and Germany.
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To address this, Lufthansa initially proposed surrendering airport slots, traffic rights, and even airplanes to a rival carrier. However, these concessions appear to be insufficient in the EU's eyes. The sources claim the new offer doesn't differ markedly from the earlier one, raising doubts about whether Lufthansa has done enough to appease competition regulators. Further complicating matters is the EU's alleged dismissal of Ryanair as a significant competitor on the relevant routes.
This downplaying of a major budget carrier could potentially strengthen Lufthansa's case, but it remains to be seen if it will be enough to sway the regulators. There's still a glimmer of hope for Lufthansa. The possibility of tweaking the remedies based on feedback from the Commission, competitors, and even customers exists.
If Lufthansa can offer more substantial concessions or convince the EU about the competitive landscape, the deal might still get the green light. For now, the wait continues. The future of the proposed acquisition hinges on whether Lufthansa can bridge the gap between its offer and the EU's antitrust concerns.