European Commission approves Lufthansa’s stake in ITA Airways with conditions

Brussels has conditionally approved Lufthansa’s acquisition of a 41% stake in Italy’s ITA Airways, the successor to Alitalia. The deal, signed in May 2023, includes an option for Lufthansa to increase its stake to 100%.

The European Commission had concerns about reduced competition on certain routes, leading to an in-depth investigation. To address these concerns, Lufthansa and the Italian government proposed corrective measures, including providing rival airlines with the resources to start direct flights between Rome or Milan and Central European airports, and transferring flight slots at Milan airport to competitors. They also committed to agreements to enhance competition on long-haul routes between Italy and countries like the US, Canada, Japan, and India.

The announcement was celebrated by Italian and Lufthansa officials as a significant achievement. However, the European Consumer Organisation (BEUC) expressed concerns over the lack of clarity on the corrective measures and potential negative impacts on consumers, such as higher prices and reduced service quality.

The acquisition, valued at 325 million euros, will be carried out through a capital increase, with the Italian state injecting an additional 250 million euros into ITA Airways. This investment aims to strengthen Lufthansa’s position in the global market and provide ITA Airways with a solid shareholder, benefiting the Italian job market.