Cartel Office approves Lufthansa’s purchase of 10% stake in airBaltic despite concerns

Germany’s Federal Cartel Office has approved Lufthansa’s acquisition of a 10% stake in Latvian airline Air Baltic, despite identifying competition concerns on routes between Germany and the Baltic states (Riga, Tallinn, Vilnius).

The approval was granted because these routes are considered minor markets with annual revenues under €20 million, requiring clearance under current merger laws. Ticket prices may rise, as Lufthansa and airBaltic have previously competed closely on several of these routes with limited alternative options for consumers.

Lufthansa secured the stake by purchasing convertible bonds worth €14 million and will gain a seat on airBaltic’s supervisory board.

While airBaltic remains majority-owned by the Latvian state, there are plans to involve Estonia and Lithuania ahead of a possible IPO. The Cartel Office emphasised that European competition law would only come into play if Lufthansa were to gain control of airBaltic.

airBaltic is a key wet lease partner for Lufthansa Group carriers, leasing aircraft and crews for European operations.