Lufthansa Group’s acquisition of a share in Italian carrier ITA Airways has been cleared by European competition regulators, following acceptance of remedy-taking candidates.
ITA states that it “welcomes the final approval” of the transaction which involves transferring a stake held by the Italian ministry of economy and finance to the German operator.
The airline says clearance is based on remedies agreed by the parties, and adds that it will “continue to work in support” of the ministry to close the transaction.
Three airline operations – EasyJet, IAG and Air France-KLM – have been accepted as “suitable” remedy-takers under the commitments made by Lufthansa Group and the Italian ministry, says the European Commission.
Such approval had been a condition for permitting the Lufthansa-ITA tie-up.
“Following [the 29 November] approval, Lufthansa and the [Italian ministry] can implement the transaction,” says the Commission.
The remedy package offered in exchange for regulatory clearance comprised commitments in three key areas.
Lufthansa and the ministry had to make assets available to one or two competitor carriers which would enable them to open nonstop flights between Rome or Milan and certain Central European airports.
At least one of these competitors would also be given access to ITA’s domestic network in order to offer indirect services to other Italian cities.
Slots had to be made available at Milan Linate airport for short-haul routes, while competitiveness on long-haul routes between Italy and North America also had to be improved through agreements – such as interlining or slot-swaps – with rival airlines.
Lufthansa and the ministry selected EasyJet as the preferred candidate for the short-haul routes, as well as the Linate slots. IAG and Air France-KLM were chosen as the long-haul remedy-takers.
All three candidates have been accepted by the Commission, which says they meet the criteria of being independent from Lufthansa, the ministry and ITA, while also presenting themselves as viable competitors with no risk of delayed implementation.
The Commission says it only accepts proposed remedy-takers when it is “convinced” that they have the “ability and incentive” to operate in a way that constitutes a “competitive force on a lasting basis”.
EasyJet disclosed during its recent full-year financial briefing that it planned new bases in Rome Fiumicino and Milan Linate as a result of the remedial measures.
Approval of the Lufthansa-ITA tie-up, almost exactly a year after the Commission was notified of the proposal, follows in-depth investigation into the potential competition impact. Lufthansa intends to take a 41% share of ITA.
