The European Commission confirms its objections to Lufthansa's acquisition of ITA

At the end of 2023, Lufthansa indicated its desire to acquire a 41 percent stake in the state-owned ITA Airways. A deal worth €325 million was agreed with the shareholder, the Italian Ministry of Economy and Finance. At a later stage, Lufthansa may become the full owner of ITA.

The European Commission launched an investigation into the investment from January 23, and now says preliminary findings suggest the German-Italian mix would reduce competition “on certain routes” and could lead to higher ticket prices or reduced service.

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Brussels notes that the statement of objections is a formal step in the investigation in which the concerned parties are informed of existing concerns. The committee said: “Sending this does not constitute a prejudgment on the final outcome of the investigation.”

Now Lufthansa and the Italian government have the opportunity to respond and propose “remedies” that would address concerns about reduced competition.

The committee explains its objections in a statement. It fears that the takeover will significantly reduce competition on a “certain number” of short routes between Italy and Central European countries.

This also applies to long-haul flights between Italy, the USA, Canada and Japan. Now Lufthansa and ETA are competitors on these routes, which are served by few other airlines. The Commission says the merger of the two companies would leave little choice for consumers.

There are also concerns about Milan Linet's position. The dominance of the combined Lufthansa/ITA airline at this airport has become too great in the eyes of the European Commission.

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Lufthansa has now responded to the letter from Brussels, saying it will soon present proposals “in a careful manner”. “We continue to have full confidence that ITA will become part of the Lufthansa Group,” the company said in a statement from Frankfurt.

One option through which the German group could accommodate the European Commission is to give up places in ITA's hubs, especially in Milan and Rome.

With Lufthansa itself, Austrian Airlines, Swiss Airlines and Brussels Airlines, the Lufthansa Group is already the largest airline group in Europe, measured by turnover, and will strengthen this position with ITA Airlines in its ranks.