The European Commission said Wednesday
that it has approved the planned merger of Lufthansa and ITA
Airways. The EU executive added, however, that the green light
for the operation was conditional on the implementation of
remedies to protect competition regarding Milan's Linate
airport, short-haul routes between Italy and Central Europe, and
long-haul routes between Rome's Fiumicino airport and North
America. The German airline will acquire from a 41% stake in ITA
from the Italian economy ministry (MEF) through a
325-million-euro capital increase, with the stake set to rise to
100% in a second phase - by 2033 - for a total investment of 829
million. The MEF currently owns ITA, the company that replaced
the loss-making former flag-carrier Alitalia in 2021. The
Commission approved the move after an in-depth investigation of
the proposed transaction, which included a series of objections
on competition grounds that it demanded be fixed. Unions
representing Lufthansa and ITA Airways employees recently sent a
joint letter to European Competition Commissioner Margrethe
Vestager calling for the operation to be given the green light.
In a statement, the Commission said that, while ITA is
performing well today, its long-term sustainability as a
stand-alone carrier would have remained highly uncertain without
the transaction. "At a time when consumers are facing
increasingly higher prices for air travel, it is very important
to preserve competition in the sector," said Vestager. "This is
why we have assessed very carefully whether the acquisition of a
controlling stake in the new Italian flag carrier ITA by
Europe's largest network carrier Lufthansa would raise
competition concerns. "We needed to prevent that passengers end
up paying more or end up with fewer and lower quality air
transport services on certain routes in and out of Italy. "The
package of remedies proposed by Lufthansa and the MEF on this
cross-border deal fully addresses our competition concerns by
ensuring that a sufficient level of competitive pressure remains
on all relevant routes".
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