After a long and complex negotiation that lasted months, with numerous rounds of negotiations and intense discussions between the parties involved, it finally seems that an agreement has been reached for the commercial marriage between Ita Airwaysthe Italian national airline, and the German aeronautical giant Lufthansa.
Authoritative sources from European circles reveal that, on Wednesday 3 July, theEuropean Union he will grant his definitive green light to this important operation of consolidation of the sector, one day before the deadline initially scheduled for July 4. This announcement comes after the competent European authorities had already expressed a positive orientation at a technical level on June 17, followed by the approval of the various national authorities of the different Member States of the Union.
EU approval
Last June 17, the European Commission gave a preliminary positive indication on the agreement between the two companies, lifting the veil of uncertainty that has enveloped the markets and analysts for weeks. Concerns regarding competition and the impact that this merger could have on the market were addressed through concrete proposals for remedies, which convinced the Directorate General of Competition of the effectiveness of the preventive measures adopted by the companies.
Conditions for competition
The agreement between the two companies, which will arrive a day early, provides specific conditions to safeguard competition, especially in the strategic Milan-Linate airport and on both short and long-haul routes. One of the main clauses provides for opening up to competitors, guaranteeing the possibility for other companies to obtain slots to replace those sold by Lufthansa. This change was initially welcomed positively concerns about Lufthansa’s potential monopoly in Milan Linate.
The focus was particularly on short- and long-haul flights, with improved agreements that ensure operational continuity and a significant presence of both companies, especially, as mentioned above, in the strategic hub of Milan Linate. For long-haul flights, the guarantee of a continuous service for at least three years, both with direct flights and with stopovers, underlined the commitment to high quality of service and customer satisfaction.
Focus on long-range agreements
The greatest difficulties arose on the long-haul routes from Fiumicino to North America. After weeks of negotiations, Lufthansa agreed to open these routes to competing airlines, guaranteeing in exchange the immediate integration of Ita into its Star Alliance joint venture, which already includes United and Canada Airlines. This will allow other large European airlines such as Air France, Iberia and British Airlines to operate on the same routes, albeit with flights that include at least one stopover, but keeping fares and flight times competitive compared to Ita-Lufthansa.
Investments and governance
Lufthansa’s entry into Ita’s capital was defined with an initial share of 41%, for an investment of 325 million euroswith the intention of increasing up to 100% with further investments planned. The board of directors will consist of five members, three of whom are Italian, including the chairman, and two Germans, including the CEO. Lufthansa also announced an industrial plan to transform Rome Fiumicino into an intercontinental hub focused on routes to South America, Africa and Asia.
