EU Commission approves Lufthansa's entry into ITA Airways subject to conditions
According to the Commission's assessment, Lufthansa and ITA Airways have been strong and close competitors on certain routes originating in Italy, particularly short-haul flights between Italy and middle European countries. The competition on these routes reportedly comes primarily from low-cost carriers like Ryanair, which often operate from less busy airports.
The Lufthansa and the Italian state, as the former owner of ITA Airways, have now committed to providing one or two competing airlines with the necessary funds to offer direct flights between Rome or Milan and central European airports, the Commission announced on a Wednesday. ITA Airways will have to relinquish takeoff and landing slots at Milan Linate Airport for this purpose.
This will prevent ITA from having a dominant position in Milan, the Commission added. Furthermore, ITA Airways will have to swap attractive takeoff and landing slots on long-haul flights from Italy to North America with its competition. According to Brussels, this could lead to more direct flight options on several routes.
ITA Airways emerged from the chronically crisis-ridden Alitalia in 2021, with the Italian state having intervened in 2017. However, Rome failed to find an investor to reduce its stake. The green light from Brussels for Lufthansa's entry into ITA Airways therefore pleased the Italian government's leader, Giorgia Meloni.
The German conglomerate plans to initially acquire a 41% stake for 325 million euros with an option to later buy the entire company. Before the takeover, ITA Airways had significantly reduced its losses: in 2022, the airline closed the year with a deficit of 486 million euros, while in 2023, it reportedly only had losses of five million euros according to company statements.
- The EU Commission's assessment indicated that Lufthansa and ITA Airways faced strong competition on certain routes, particularly short-haul flights between Italy and middle European countries, mainly from low-cost airlines like Ryanair.
- The Italian state, as the former owner of ITA Airways, and Lufthansa have agreed to provide funding to at least one or two competing airlines to offer direct flights between Rome or Milan and central European airports.
- ITA Airways will relinquish some takeoff and landing slots at Milan Linate Airport to facilitate these direct flights, as per the instructions of the EU Commission.
- This decision by the EU Commission aims to prevent ITA Airways from having a dominant position in Milan and to provide more flight options for passengers, potentially including direct flights between Italy and North America.
- The German airline Lufthansa is planning to initially acquire a 41% stake in ITA Airways for 325 million euros, with the option to buy the entire company in the future.
- The financial situation of ITA Airways improved significantly before Lufthansa's entry, as the airline reportedly reduced its losses from 486 million euros in 2022 to only 5 million euros in 2023, according to company statements.
