• Sat. May 25th, 2024

EU Investigates Lufthansa-Mef-Ita Airways Merger for Potential Competition Concerns

BySamantha Nguyen

Mar 25, 2024
The EU’s interests in the ITA and Lufthansa merger

The European Commission has expressed concerns about the potential impact of Lufthansa and Mef’s acquisition of joint control of Ita Airways. The Commission believes that competition on some routes in the market for passenger air transport services in and out of Italy could be restricted as a result, leading to higher prices or reduced quality of services post-transaction.

The Commission’s specific concerns 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. It 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, whether consumers or businesses, 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 and does not predetermine the outcome.

The European Union (EU) has launched an investigation into Lufthansa Group AG’s proposed acquisition of joint control over Italian flag carrier Alitalia SPA (Ita Airways), citing concerns over reduced competition in certain markets.

In a statement released on Monday (October 17), EU antitrust chief Margrethe Vestager said her agency had received information from Lufthansa regarding its plans for Alitalia SPA (Ita Airways) acquisition.

Vestager stated that “the merger could lead to negative effects on competition” in certain markets.

She said: “We will closely examine this case under EU antitrust rules.”

Lufthansa has said it plans to acquire 50% ownership stakes in Alitalia SPA through its subsidiary Swissair AG while keeping Italian state ownership at around 30%. The deal is expected to be worth €5 billion ($5.8 billion).

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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