On November 29, 2024, the European Commission gave its final approval to Lufthansa's proposed remedies package for its acquisition of a 41% stake in Italy's ITA Airways. This decision marks the end of a long review process that began in 2022, focusing on ensuring that the deal would not harm competition within the European aviation market. The approval hinged on Lufthansa's commitment to offer certain slots and routes to competitors at Milan's Linate Airport, one of the busiest in Italy.
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Specifically, Lufthansa agreed to transfer slots so that EasyJet, IAG (which includes British Airways and Iberia), and Air France-KLM could start short-haul flights from Rome and Milan to central European destinations. This move aimed to maintain competitive pressure on key routes, ensuring that consumers would not face higher prices or reduced service options due to the merger. The deal, valued at €325 million, allows Lufthansa to take a significant step towards expanding its presence in Southern Europe, particularly in Italy, which has been a strategic market for European carriers. Lufthansa's CEO, Carsten Spohr, welcomed the decision, stating that it would lead to a stronger ITA and enhance competition in the Italian market.
This approval was not without its hurdles. Initially, there were concerns about the potential monopolistic effects on short-haul routes within Italy and to neighboring countries, as well as on long-haul routes from Italy to North America. The European Commission had earlier warned that the deal could lead to less competition, potentially impacting ticket prices and flight schedules. However, the remedies package addressed these concerns by ensuring that rival airlines could continue to offer competitive service.
The agreement also includes provisions for Lufthansa and ITA to work with competitors to improve connections and increase the frequency of non-stop flights, supporting interlining agreements to enhance passenger experience and connectivity. This cooperation extends to baggage handling and slot exchanges, which are critical for maintaining an efficient and customer-friendly service network. With this approval, Lufthansa can now move forward with integrating ITA into its operations, although the final closure of the deal still requires the implementation of these remedies and further regulatory clearances outside the EU.
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