Risk of Higher Prices and Decreased Service Quality: European Commission Expresses Concerns Over Lufthansa-Ita Airways Joint Control

The EU’s interests in the merger between ITA and Lufthansa

The European Commission has expressed concerns over Lufthansa and the Ministry of Economy and Finance (Mef)’s plan to acquire joint control of Ita Airways. The Commission believes that this project could potentially lead to increased prices or decreased service quality for customers, particularly on short-haul routes connecting Italy with Central Europe, where Lufthansa and Ita compete directly against low-cost carriers like Ryanair.

On long-haul routes between Italy and the United States, Canada, and Japan, the Commission sees competition between Ita and Lufthansa and its joint venture partners. They operate as a single entity in the Commission’s assessment. Additionally, Ita’s dominant position at Milan-Linate airport could create obstacles for competitors to offer air passenger transport services to and from the airport.

The Commission aims to ensure that this transaction does not have negative effects on customers in terms of increased costs or decreased service quality. While the concerns related to competition represent a small percentage of the total routes and passengers served by both parties, they cannot be ignored entirely.

The next step in the investigation is the issuance of a Statement of Objections, where the Commission raises specific objections against the companies involved. Lufthansa and Mef have until April 26, 2024, to respond to these objections, review the Commission’s findings, and propose solutions to address any competition concerns they may have raised.

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