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Lufthansa Proposes Remedies to Address EU Concerns Over ITA Airways Stake Acquisition

 |  January 9, 2024

In a bid to alleviate European Union (EU) competition concerns regarding its pursuit of a minority stake in Italy’s state-owned ITA Airways, Lufthansa (LHAG.DE) has submitted remedies for consideration, according to statements from EU antitrust regulators on Tuesday.

A spokesperson for the European Commission confirmed that the regulatory body would now evaluate the proposed commitments, refraining from disclosing specific details. However, sources familiar with the matter revealed that Lufthansa is prepared to address potential issues by relinquishing slots at Milan-Linate Airport where overlaps exist on approximately half a dozen European routes leading to Lufthansa hubs in Frankfurt, Munich, Zurich, and Vienna.

During the EU’s preliminary review of such deals, remedies are expected to be comprehensive, effective, and capable of entirely eliminating competition concerns. They must also be implementable within a short period. The European Commission, acting as the competition enforcer, has set a deadline of January 29 for its decision on Lufthansa’s bid.

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

In anticipation of the decision, Lufthansa’s proposal may lead to modifications in its operations at Milan-Linate Airport, a key hub for the airline. By offering to cede slots, Lufthansa aims to assure regulators that the acquisition of a minority stake in ITA Airways will not unduly impact competition in the European aviation market.

EU antitrust regulators may seek additional feedback from competitors and industry stakeholders before finalizing their decision. The regulatory body has the option to either accept the proposed remedies, demand further concessions, or initiate a more in-depth four-month investigation to thoroughly assess the potential impact of the deal on competition.

Industry analysts are closely watching the developments as the outcome of this regulatory review will significantly influence the trajectory of Lufthansa’s strategic expansion plans and the broader landscape of European aviation.

Source: Reuters