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Lufthansa offers concessions to gain EU nod on ITA takeover

Published 04/15/2024, 05:01 AM
Updated 04/15/2024, 05:16 PM
© Reuters. FILE PHOTO: An Italian carrier Italia Trasporto Aereo (ITA Airways) plane is checked by workers at Fiumicino airport in Rome, Italy, January 31, 2023. REUTERS/Remo Casilli/File Photo

By Foo Yun Chee

BRUSSELS (Reuters) - German airline Lufthansa has offered concessions aimed at securing EU antitrust approval for its acquisition of a minority stake in Italian carrier ITA Airways, an update on the European Commission website shows.

The EU executive did not provide details of the remedies, in line with its policy, and is expected to seek feedback from rivals and customers before clearing the deal or making further demands.

Lufthansa's remedies could include ceding airport slots, traffic rights and planes to a rival, similar to those in a Korean airline deal approved by the Commission, a person with direct knowledge of the deal has told Reuters.

The EU antitrust watchdog has said the deal threatened competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes between Italy and the United States, Canada and Japan.

It would also strengthen ITA's dominant position at Milan's main airport.

Lufthansa's plan to buy a 41% stake in state-owned ITA for 325 million euros ($346.3 million) and British Airways owner IAG's bid to buy out Spain's Air Europa are part of sector consolidation as European carriers seek to compete better against U.S. and Gulf rivals.

Lufthansa is expected to attend a closed-door hearing in front of senior Commission officials and national competition officials on Friday, a person with direct knowledge of the matter said.

© Reuters. FILE PHOTO: An Italian carrier Italia Trasporto Aereo (ITA Airways) plane is checked by workers at Fiumicino airport in Rome, Italy, January 31, 2023. REUTERS/Remo Casilli/File Photo

The Commission is due to decide on the deal by June 6

($1 = 0.9384 euros)

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