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Lufthansa and ITA Airways: Concessions for EU approval of takeover

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Lufthansa is close to receiving approval from the EU Commission to join the Italian state airline ITA Airways. This step marks an important milestone in the consolidation of the European aviation industry. But in order to obtain this approval, the German airline had to make extensive concessions.

According to insiders, Lufthansa has agreed to allow two of its competitors to offer feeder flights to their hubs in Europe from Rome's Fiumicino airport. This is intended to ensure that competition on the transatlantic routes from Rome is not affected. In concrete terms, this means that passengers can, for example, change to US flights operated by Dutch airline KLM in Amsterdam. According to flight schedule data, KLM already flies up to five times a day between Rome-Fiumicino and Amsterdam. ITA Airways itself serves the route up to twice a day.

A person familiar with the matter told Reuters that in addition to KLM, another Lufthansa competitor will offer these feeder flights. In addition, ITA Airways is to hand over some of its direct flights from Rome-Fiumicino to North America to another airline. These measures are aimed at increasing consumer choice and promoting competition.

Negotiations with the EU Commission

Lufthansa did not comment directly on the new details, but confirmed that constructive talks are taking place with the EU Commission. Competition Commissioner Margrethe Vestager is apparently close to approving Lufthansa's takeover of an initial 41 percent of ITA Airways after a long struggle over competition requirements. In the long term, the Alitalia successor is to be fully integrated into the Lufthansa Group. With its requirements, the EU Commission is aiming to prevent the merger from leading to a reduced offer and higher ticket prices, which would harm consumers.

Background and significance of the takeover

The acquisition of ITA Airways by Lufthansa is part of a larger strategy to consolidate and strengthen the European aviation industry. ITA Airways, the successor to the insolvent Alitalia, has struggled with financial difficulties and a challenging market environment since its founding in 2020. By integrating into the Lufthansa Group, ITA Airways could benefit from the synergies and strong market position of Lufthansa.

The approval of the EU Commission is of great importance for Lufthansa. It enables the company to strengthen its market presence in southern Europe and expand its network of important European hubs. In addition, the integration of ITA Airways could help Lufthansa to further consolidate its position on the lucrative transatlantic routes.

Outlook and further developments

The EU Commission's final decision is expected by July 4. If approval is granted, nothing will stand in the way of the full integration of ITA Airways into the Lufthansa Group. This could significantly change the dynamics of the European aviation industry and further strengthen Lufthansa's position as the leading European airline.

The takeover also shows the importance of European competition policy and the role of the EU Commission in ensuring a fair market. Lufthansa's concessions to allow its competitors' feeder flights and to hand over direct flights to other airlines are a sign that even large companies must be prepared to make compromises in order to overcome regulatory hurdles. Overall, it remains to be seen how this takeover will affect European air traffic. The consolidation could lead to more efficient processes and a stronger market position for the airlines involved, but it could also affect the competitive situation and pricing. For passengers, this could have both positive and negative effects, depending on how the new capacities and routes are designed.

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