It’s not official, but the buzz about the EU Commission’s rejection of the merger between ITA and Lufthansa has become deafening since yesterday. So much so that in Brussels they are only waiting for the outcome of the elections to officially announce the stop. The one standing in the way, as was now well understood, is the executive vice-president of the EU Commission and head of the competition directorate (DgComp), the Danish Margrethe Vestager. A professional politician of the radical left, who in Europe is in the group of liberal democrats.
Vestager, as head of DgComp, has the final say to authorize or reject the operation, evaluating the effects on competition. And his line is that with Lufthansa together with the former Alitalia a quasi-monopoly is created in flights from Linate and Fiumicino to Central Europe and a dominant position in intercontinental flights between Italy, the USA and Japan, where Lufthansa and its allies are already very strong . A position not at all shared in Rome and Berlin, which also tried to collaborate with some corrective measures. But there’s nothing to do. This is why Vestager’s position seemed hostile from the first moment: behind the doubts about an alleged dominant position lies the hand of Emmanuel Macron.
The French president, who shares the liberal democratic positions in the European Union with Danish politics, fears the consequences for Air France, another big player in the skies of the Old Continent, which has been partnered with the Dutch KLM for years.
In other words, the Ita-Lufthansa operation would also have been taken in the middle of the Macron-Vestager axis. The fact is that just on the eve of the elections which will change balances and men in Brussels and Strasbourg, it became known that on Ita-Lufthansa the discussions with the European Commission have broken down on the question of long-haul routes to the USA and the participation of Ita to the jv that links Lufthansa to United Airlines and Air Canada. On this point in particular, no convergence was found.
The official date of the Antitrust decision remains 4 July, but sources close to the dossier give it as closed because Ita would not have agreed to cede all the slots requested by the Antitrust in Europe, and in particular those at Linate, in addition to those intercontinental where both companies have direct flights (to the USA, Canada and Tokyo).
It is no coincidence that yesterday strong critical voices were raised by the Italian government. «I think that on the Ita-Lufthansa affair – said the Minister of Economy Giancarlo Giorgetti – every single Italian, from the right and the left, has perfectly understood that what the government did is the right thing. I am very sorry that in Europe today they have not understood this. This is a major operation of interest to Italy and Europe. Let’s see how it ends.” While the deputy prime minister and minister of transport, Matteo Salvini, took things further: «If it were true that Brussels is waiting for the day after the elections to reject the Ita-Lufthansa marriage, putting thousands of jobs in Italy at risk and doing a favor to the French, it would be very serious.” The 2023 accounts of the Italian company were considered positively by sector observers. The net loss was 5 million against 481 million in 2022, with 2.4 billion in revenues and a positive Ebitda of 70 million. The passengers transported were approximately 15 million (+47%). 450 million in cash on hand. It was therefore an “almost break even” a year ahead of schedule.
This does not mean that Ita can stand on its own two feet: given the nature of the business, size is crucial.
Ita certainly needs an industrial partner and this has been identified for some time with Lufthansa, with which a long journey has been made. Too bad the game is over at this point.
