Brussels Launches Investigation into Lufthansa’s Stake in ITA Airways

The European Union has initiated a thorough investigation into Lufthansa’s acquisition of a minority stake in Italy’s ITA Airways, citing concerns over potential adverse effects on competition. This move underscores the growing regulatory challenges faced by airlines seeking consolidation in the wake of the post-pandemic recovery, reported The Financial Times.

Announcing the probe on Tuesday, EU regulators expressed apprehensions that the deal “may reduce competition in the market for passenger air transport services on several short-haul and long-haul routes in and out of Italy.” The investigation follows Lufthansa’s agreement in May to acquire a 41% stake in ITA Airways, the successor company to the now-insolvent Alitalia. Notably, the terms of the deal also grant Lufthansa the option to eventually purchase up to 100% of the Italian carrier.

Despite initial concessions made by Lufthansa in an attempt to avert a detailed investigation, the EU Commission remains unconvinced that these measures are sufficient to allay concerns about potential anti-competitive outcomes.

Read more: Lufthansa Nearing Deal To Buy 40% Of ITA Airways

In response to the regulatory scrutiny, Lufthansa issued a statement asserting its commitment to facilitating a prompt resolution to the EU Commission’s review and subsequent implementation of the investment. The airline stated, “We will continue to work vigorously for a swift conclusion of the EU Commission’s review and for the subsequent implementation of the investment.”

On the other hand, ITA Airways has yet to respond to the developments, as the airline did not immediately reply to requests for comments.

The investigation by Brussels reflects a broader trend of heightened regulatory scrutiny in the airline industry as carriers navigate challenges stemming from the global pandemic.

Source: FT