The European Commission is preparing to provide initial guidance on the marriage between Ita Airways and Lufthansa between the end of this week and the beginning of next. In Brussels they keep their cards hidden, they underline that the discussions are continuing, but the EU Antitrust offices consider the phase of discussion – and sometimes clash – with the Italian Ministry of Economy and the German airline to be over. This is what they explain to the Courier three sources familiar with the dossier. The final date for the decision on the industrial operation remains July 4, but Rome and Frankfurt will receive the outcome at least a week before. The same sources also underline that the opinion could arrive within 24-48 hours.
End of discussions
This concludes the “relaunch game” that lasted weeks and which saw Lufthansa deliver three packages of remedies and further adjustments. In the latest version, Ita and Lufthansa propose the transfer of 15-17 daily pairs of slots at Milan Linate airport (equal to 34 return flights) – as anticipated by Courier in the past few weeks -, the entry of easyJet and Volotea on some European routes where the merger would give rise to monopolies both from Linate and from Rome Fiumicino.
Intercontinental flights
On the intercontinental front – the last remaining issue to be resolved and also the most difficult one – the Germans and Italians reiterate their intention to keep ITA out for a couple of years from the A++ transatlantic joint venture that Lufthansa has with United Airlines and Air Canada. The EU Antitrust first asked for a permanent exclusion of ITA from the commercial alliance which generates billions of euros in revenues every year on Europe-USA/Canada flights, then suggested a 10-year “ban”, something currently considered unacceptable by subjects involved, according to the sources consulted.
The parallel activity
At an operational level, the intention would be to divide Ita’s activities on flights between Italy and North America from the rest of the German-managed Italian carrier, so as to maintain transatlantic competition for a certain period of time. In this period of time, the management of routes to the USA and Canada would be entrusted to the president of ITA (appointed by the Treasury) and to a figure similar to that of a chief commercial officer without any coordination with Lufthansa. At the same time, the Germans and Italians offer to “fuel” the intercontinental flights of the competition in their hubs: Paris (Air France), Amsterdam (KLM), Madrid (Iberia), London (British Airways).
The meeting with the unions
On Tuesday afternoon, 11 June, the leaders of Ita – the president Antonino Turicchi and the general director Andrea Benassi – met with the acronyms Filt Cgil, Fit Cisl, Uiltrasporti and Ugl Ta. Union sources explain that Turicchi spoke of a company that in the first five months performed better than the same period in 2023 in terms of revenues. But he also underlined a problem on connections with destinations in the Middle East, moreover those opened more recently.
Ita’s liquidity
Ita’s cash amounts to 420 million euros – it was 450 million at the end of 2023 – and another 240 million will arrive as financing to purchase the owned aircraft. In the meeting the ITA leaders also confirmed that they are working on the opening of the Rome-Bangkok route – news anticipated by Courier — and to be looking for other long-range aircraft to strengthen intercontinental connections which are also those that generate the most profits. The unions are asking to review the contract signed in 2021 with an ITA considered a start-up and in the midst of the pandemic.
The reactions
«We are awaiting the decision from Brussels which should arrive shortly, but a possible negative outcome would be very serious damage, especially for citizens», comments the national secretary of Uiltrasporti, Ivan Viglietti. “We will not accept penalties for workers so the industrial plan must go forward.” «The meeting was quite positive also because the state of the company is good and they told us that in the first 5 months of the year 36% more revenues were recorded compared to 2023», adds the national coordinator of Filt CGIL, Fabrizio Cuscito. «This European Commission will decide on the Ita-Lufthansa operation».
The agreement
On 30 November 2023, the Ministry of Economy (which owns Ita) and Lufthansa notified Brussels of the operation which involves the entry of the Germans, initially with 41% (for 325 million euros) to progressively rise to 90 and 100 %. The European Commission has raised several doubts about the operation because it fears it could reduce competition at Milan Linate, between Italy and part of Europe and on transatlantic routes. For this reason he asked those involved to make a series of sacrifices to respond to those concerns.
The exclusivity expiring
The exclusivity of the agreement signed by Mef and Lufthansa “expires” on June 30, a year having passed since the handshake at the Ministry of Economy in Rome. But with a European orientation expected within a week there would be plenty of technical time to extend the deadline by one or two months if Brussels granted the green light for the Germans to enter Italy. But the judgment of the EU Antitrust remains, at the moment, the biggest EU mystery.
