Negotiations for Lufthansa’s entry into Ita Airways continue to take center stage. Controversy and protests from other carriers, especially the well-known ones in the low-cost world. At the same time doubts highlighted by the European Commissionwhich received a new proposal within the expected time frame (4 am on 6 May 2024) to comply with the guidelines drawn up by Brussels.
New plan
Integrations were requested, to guarantee a fair system following the integration process of the two companies. In the crosshairs specifically Milan Linateas well as about 20 routes. A reduced quota when compared with the 39 connections indicated in the Statement of objections received from Brussels at the end of March 2024.
What is feared is an excessive squeeze on competition. In fact, a control on some routes and, ultimately, an average share of rising prices for users. Through a statement, Lufthansa informs that it has submitted an improved offer in the “context of the authority’s Phase II investigation into the proposed acquisition of Ita”.
In the package, it is underlined, all the concerns that emerged about short and long-haul flights have been reviewed. At the same time, a concrete response was also given to concentration risk at Milan Linate.
All this obviously had an impact on the scheduling. The European Commission had to move to 4th July your own pronouncement. It was previously scheduled for June 13. That’s when we’ll know if the acquisition of 41% of Ita Airwaysfor an outlay of 325 million euros, will be successful.
What changes
Going into detail of the new proposed plan, on Linate there will be a reduction of 11 pairs of slots, should the European Commission accept everything without modifications. We are therefore talking about 22 flights, round trip, which can be assigned to another company (and the others on the waiting list). At present EasyJet appears to have a clear advantage in this potential assignment. This is the response to the risk of a strengthened dominant position in the well-known Lombardy port.
There Competition Directorate he reported in March 26 short-haul routeswith connections between Italy and central Europe. Specifically, we look at Germany, Switzerland, Austria and Belgium. To date, Ita Airways and Lufthansa are considered head-to-head in competition with direct and indirect flights. A union of forces would therefore have changed the balance in economic terms. Now, however, we are focusing solely on the Linate and Fiumicino airports, effectively excluding connections with other cities.
Outside European borders, however, we are talking about routes to the United States, Canada and Japan. A total of 13 in the initial March document. The Competition Commission’s assessment sees Lufthansa considered as a single entity with its Star Alliance partner (and transatlantic joint ventures). In view of this merger, it seems that ITA may be kept out of these agreements for a limited but not yet specified period of time.
Here are the words of Carsten Spohr, CEO of Lufthansa: “We expect a positive decision from Brussels in the summer. Everyone benefits from this merger. Guests flying to and from Italy will have better choice and better connections. Also Italy, as the third largest economy in the EU, with guaranteed direct connection to global markets. Finally, the employees and the company itself, who will enjoy future sustainability.”
