The EU’s interests in the ITA and Lufthansa merger

Italian Airline Merger Faces EU Scrutiny for Competition Concerns

The European Commission has expressed concerns regarding the acquisition of joint control of Ita Airways by Lufthansa and the Mef. The Commission believes that competition on some routes in the market for passenger air transport services in and out of Italy could be restricted as a result, potentially leading to higher prices or reduced quality of services for customers post-transaction.

The Commission’s specific concerns relate to short-haul routes connecting Italy with Central Europe, where Lufthansa and Ita directly compete with low-cost carriers such as Ryanair. Additionally, on long-haul routes between Italy and the United States, Canada, and Japan, the Commission believes that competition from other airlines is insufficient. It considers Ita, Lufthansa, and its partners as a single entity after the merger.

One major concern is Ita’s dominant position at Milan-Linate airport, which could make it challenging for competitors to provide air passenger transport services to and from that location. The Commission emphasizes that its goal is to prevent negative effects on customers in terms of increased costs or decreased quality of services.

Lufthansa and Mef now have the opportunity to respond to the Commission’s statement of objections, examine the Commission’s findings, request a hearing, and propose solutions to address the competition concerns. The companies can submit remedies at any point until the appeal deadline of April 26, 2024. The Commission’s issuance of a Statement of Objections is a formal step in the investigation process and does not predetermine the outcome.

In conclusion, while Lufthansa and Mef may be excited about acquiring joint control over Ita Airways, they must carefully consider their actions and address any concerns raised by regulators like the European Commission. Failure to do so could result in significant negative consequences for both customers and competitors in the air travel industry.

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