The European Commission has officially raised “objections” to Lufthansa Group’s proposed purchase of a stake in Italian carrier ITA Airways over fears the deal could increase flight prices or “decrease quality” of airline services to and from Italy.
The commission said in January that it would fully investigate the deal, first announced in May 2023, which would see the German company acquire an initial 41 per cent stake in ITA from the Italian government.
“The commission is concerned that customers may face increased prices or decreased quality of services after the transaction,” said the EC in a statement setting out its preliminary view of the proposed acquisition.
The commission added that the deal could “reduce competition” on airline routes between Italy and countries in Central Europe, as well as on long-haul services from Italy to the US, Canada and Japan.
It also warned that the acquisition could strengthen ITA’s position at Milan Linate and “make it harder for rivals to provide passenger air transport services” to and from the airport.
The commission’s statement of objections is a formal step in the investigation process but it does not “prejudge” the final outcome.
Lufthansa and the Italian government can reply to the objections and request a hearing. They can also propose remedies to address the commission’s competition concerns, which must be done by the deadline of 26 April.
In a statement, Lufthansa said: “We are making progress with Lufthansa’s planned investment in ITA Airways. We will analyse the concerns presented by the EU Commission today, discuss each individual point in detail with the regulator and continue to co-operate with the EU Commission in a constructive way.
“As suggested by [European Commission] executive vice president Margrethe Vestager, we will shortly submit a concept for remedies to the authority in order to address any remaining concerns.
“We keep on working towards a timely approval of the transaction – also because we are convinced that competition in Europe, especially in Italy, will be strengthened by ITA Airways being part of the Lufthansa Group.”
The airline giant added that it was “ready to constructively find solutions that are compatible with the economic reality of a highly competitive Italian aviation market”.
Lufthansa said it remains “confident” that ITA will join the group before the end of this year.