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EU approves Lufthansa-ITA Airways merger amid competition concerns

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EU approves Lufthansa-ITA Airways merger amid competition concerns
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Simple Flying | Simple Flying

The European Commission has approved the merger between ITA Airways and Lufthansa, following concessions from both airlines to address competition concerns. These remedies were proposed to mitigate fears of monopolistic control over specific markets, which had been a point of concern for Brussels.

To address these concerns, easyJet will expand its short-haul network in Italy by opening new bases at Milan Linate Airport and Rome Fiumicino Airport starting next spring. Additionally, Air France-KLM and the International Airlines Group (IAG) are set to enhance intercontinental connections from Italy, particularly focusing on North American routes.

The Commission's apprehensions revolved around potential monopolies on short-haul routes between Rome or Milan and central European airports, long-haul routes to North America, and slot allocation at Milan Linate Airport. To counter these issues, it was suggested that easyJet boost its short-haul services while Air France-KLM and IAG facilitate long-haul connectivity.

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According to the European Commission: "Lufthansa and the MEF had to enter into agreements with rivals to improve their competitiveness on the long-haul routes of concern between Italy and North America, for instance through interlining agreements or slot swaps."

Despite this agreement, details about how Air France-KLM and IAG will execute their roles remain unclear as they have not released any statements regarding this development.

easyJet announced plans to establish new bases in Italy with eight aircraft stationed across Rome’s Fiumicino Airport (FCO) and Milan Linate Airport (LIN). Kenton Jarvis, easyJet CFO and incoming CEO said: "We are pleased to be approved as the short-haul remedy taker in Milan and Rome."

In terms of market presence within Italy for November 2024 according to Cirium data: Ryanair leads with 23,500 flights offering 4.5 million seats; ITA Airways follows with 10,300 flights providing 1.7 million seats; easyJet ranks third with 6,400 flights offering 1.2 million seats; Wizz Air operates fewer flights but offers more seats due to larger aircraft usage.

ITA Airways expressed satisfaction over the Commission's approval stating it "welcomes" the decision concerning its stake transfer from MEF to Lufthansa.

The merger talks began in November 2023 when Lufthansa announced its intention to acquire a significant share of ITA Airways. The initial approval came in July 2024 after addressing competition concerns which required resolution before proceeding further with the acquisition process. A dispute arose over acquisition pricing but was eventually resolved leading up to this final green light from the European Commission.

Organizations Included in this History
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