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EU Antitrust Regulators Warn Lufthansa’s Bid for ITA Airways Stake Threatens Competition

 |  March 25, 2024

In a move that could reshape the European aviation landscape, EU antitrust regulators have raised concerns over Lufthansa’s bid for a minority stake in Italian rival ITA Airways. The European Commission issued a stern warning on Monday, asserting that the deal could harm competition and potentially lead to increased prices for consumers.

EU Commissioner Margrethe Vestager highlighted the risks associated with the proposed acquisition, emphasizing that it could result in higher prices and diminished service quality. “A risk of a competition issue is of course that prices go up and services go down,” Vestager told reporters, underscoring the commission’s apprehensions about the potential consequences of the deal, reported Reuters.

The European Commission’s scrutiny has centered on the impact of the acquisition on both short-haul and long-haul routes. According to the commission, the deal poses a threat to competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes connecting Italy with the United States, Canada, and Japan. Furthermore, the acquisition would bolster ITA Airways’ dominant position at Milan’s primary airport, exacerbating concerns about market concentration.

Read more: Brussels Launches Investigation into Lufthansa’s Stake in ITA Airways

“The removal of ITA as an independent airline may have negative effects on competition in these already concentrated markets,” the Commission stated in a press release, echoing fears that the deal could further consolidate the industry and limit consumer choice. However, the Commission also noted that the routes raising concerns represent only a small fraction of total short- and long-haul routes and passengers served by both Lufthansa and ITA Airways.

The European Commission’s announcement follows a Reuters report earlier this month, which first hinted at regulatory unease surrounding the proposed acquisition. Lufthansa and the Italian government, which holds a significant stake in ITA Airways, now have until April 26 to propose additional remedies to address the Commission’s concerns.

The outcome of this regulatory battle will not only shape the future of the aviation industry in Europe but also have significant implications for consumers and businesses relying on air travel.

Source: Reuters