European Commission Investigates Lufthansa\\\'s Proposed Acquisition of ITA Airways

The European Commission has launched a thorough investigation into Lufthansa's proposed acquisition of ITA Airways, citing concerns about potential reduced competition in the passenger air transport market.

The European Commission has launched a thorough investigation into the proposed joint control of ITA Airways by Deutsche Lufthansa Group and the Italian Ministry of Economy and Finance. This investigation, conducted under the EU Merger Regulation, has been prompted by initial concerns that the transaction could potentially lead to reduced competition in the market for passenger air transport services, impacting both short-haul and long-haul routes in and out of Italy. Lufthansa Group and ITA Airways are significant players in the aviation industry, operating an extensive network of domestic, short-haul, and long-haul routes. Lufthansa’s collaboration with United Airlines and Air Canada further expands its influence, allowing coordination on pricing, capacity, and scheduling, with shared revenues on transatlantic routes.

The Commission’s preliminary investigation has revealed potential competition issues on various fronts. These include concerns about reduced competition on short-haul routes connecting Italy with Central Europe, potential monopolies on certain routes due to the overlap of Lufthansa and ITA Airways services, and the impact on long-haul routes between Italy and North America. Additionally, the acquisition could strengthen ITA Airways’ dominant position at Milan-Linate airport, potentially limiting rivals’ ability to provide passenger air transport services in and out of this key location. The impact on routes where other airlines rely on access to ITA Airways’ network for their own operations is also being assessed, which could affect services to international destinations also served by Lufthansa.

European Commission Investigates Lufthansa's Proposed Acquisition of ITA Airways

In an attempt to address some of the Commission’s concerns, Lufthansa submitted commitments on 8 January, 2024. However, these commitments were deemed insufficient in scope and effectiveness. The Commission now has 90 working days, until 6 June, 2024, to make a decision. It is important to note that the initiation of an in-depth investigation does not preclude a favorable outcome for the parties involved.

The European Commission’s investigation into the proposed acquisition of joint control of ITA Airways by Deutsche Lufthansa Group and the Italian Ministry of Economy and Finance is a significant development in the aviation industry. The potential impact on competition in the market for passenger air transport services, both within Italy and on international routes, is a matter of concern that requires thorough examination.