May 21, 2024 1:09 pm
The EU’s interests in the ITA and Lufthansa merger

The European Commission has expressed concerns regarding Lufthansa and Mef’s acquisition of joint control of Ita Airways, as it believes that competition on some routes in the market for passenger air transport services in and out of Italy could be restricted. The Commission is worried that customers may face higher prices or reduced quality of services post-transaction.

The specific concerns raised by the Commission relate to short-haul routes connecting Italy with Central Europe, where Lufthansa and Ita compete directly with low-cost carriers such as Ryanair. Additionally, on long-haul routes between Italy and the United States, Canada, and Japan, the Commission believes that competition from other airlines is insufficient. The Commission considers Ita, Lufthansa, and its partners as a single entity after the merger.

Of particular concern is Ita’s dominant position at Milan-Linate airport, which could make it challenging for competitors to provide air passenger transport services to and from that location. The Commission emphasizes that its goal is to prevent negative effects on customers in terms of increased costs or decreased quality of services.

Lufthansa and Mef now have the opportunity to respond to the Commission’s statement of objections, examine the Commission’s findings, request a hearing, and propose solutions to address the competition concerns. The companies can submit remedies at any point until the appeal deadline of April 26, 2024. The Commission’s issuance of a Statement of Objections is a formal step in the investigation process but does not predetermine the outcome.

In summary, while Lufthansa and Mef have been informed about their acquisition plans being under scrutiny by the European Commission due to concerns over potential competition restrictions in some markets for passenger air transport services in Italy.

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