Updated March 25th, 2024 at 15:37 IST

EU antitrust watchdog raises concerns over Lufthansa-ITA Airways deal

The European Commission has warned that the proposed deal could potentially harm competition and result in increased prices.

Reported by: Business Desk
Lufthansa ITA Airways deal | Image:Lufthansa
Advertisement

Lufthansa ITA Airways deal: The European Union's antitrust regulators have voiced concerns regarding Lufthansa's bid for a minority stake in Italian competitor ITA Airways, warning that the proposed deal could potentially harm competition and result in increased prices.

According to the European Commission, the deal poses a threat to competition on short-haul routes between Italy and Central European countries, as well as on long-haul routes connecting Italy with the United States, Canada, and Japan. Additionally, the agreement would bolster ITA's dominant position at Milan's primary airport.

Advertisement

In a statement released on Monday, the European Commission outlined its objections to Lufthansa, echoing earlier reports by Reuters. The commission's move places pressure on both Lufthansa and the Italian government to propose stronger remedies to address the antitrust concerns raised.

The proposed deal between Lufthansa and ITA Airways reflects the ongoing trend of consolidation within the airline industry. Notably, British Airways-owner IAG has expressed interest in acquiring Spanish airline Air Europa, further illustrating the wave of consolidation sweeping the sector.

Advertisement

Lufthansa's plan involves acquiring a 41 per cent stake in the state-owned Italian carrier for £325 million ($351.46 million) as part of a capital increase. However, with the EU antitrust watchdog raising red flags, the future of the deal remains uncertain pending further discussions and potential remedies proposed by the involved parties.

(With Reuters inputs.)

Advertisement

Published March 25th, 2024 at 15:37 IST