Lufthansa Needs To Try Harder if It Wants To Take Over ITA

Recently, new pieces of information surfaced on the ongoing proceeding for the Lufthansa Group to acquire a stake in the Italian carrier ITA.

A Long Way To Get Here

Lufthansa Group’s interests in taking over an Italian carrier date back to 2019 when the company’s board had held talks to take a majority stake in Alitalia. The latter was put under special administration in 2017 given the financial troubles. Understandably, the 2020 pandemic halted any proceedings of this sort in the aviation industry.

The Italian national airline was reborn as ITA in 2021 and then in January 2023 the talks about the German-Italian romance resumed.

Alitalia’s first flight to Washington Dulles Airport arriving on May 2, 2019 (Photo: AirlineGeeks | Ben Suskind)

The Antitrust Concerns

The investigation launched in January 2024 by the European Commission provided feedback on the matter in March. The competition concerns were highlighted as three main issues:

• The short-haul routes connecting Italy with countries in Central Europe where Lufthansa directly or indirectly competes with ITA.
• The long-haul routes between Italy and North America as well as Japan.
• ITA’s dominant position at Milan-Linate airport.

Lufthansa has until July 4 to provide remedies to be taken into account for the commission’s decision. A similar investigation is also being conducted on the proposed acquisition of Air Europa by IAG. The deadline for that proceeding is July 7, so it seems like the first week of July will be a heated one in the European aviation industry, not only because of the peak summer period.

ITA network as of May 2024 (Photo: flightconnections.com)

The Last Mile?

Lufthansa Group has already proposed specific actions. Last week it offered to keep some competing ITA short-haul flights to Germany, Belgium, Switzerland, and Austria, sources familiar with the matter said. On top of that, the carrier said to be willing to accept interlining with rivals on the sectors in question.

But most importantly North Atlantic connectivity was also already addressed. Lufthansa Group would not integrate ITA into its joint venture with other Star Alliance members: United Airlines and Air Canada. This guarantee is set to last for two years.

Lastly, Lufthansa would open Milan-Linate to low-cost competitors. Slots would be given away to easyJet and Volotea, which already have a significant presence in the Italian market, but not at the Milan city airport. This move would serve to increase the number of options on the market.

All the above might not be enough. The European Commission is seeking feedback from rivals, consumer travel organizations, and pilot groups until May 19.

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Filip Kopeć

A passionate aviation enthusiast that started off his career as an aerospace engineer, but found his true calling on the commercial side of the airline business. Now as a finance guy among avgeeks and an avgeek among finance guys, he has experience working in the Revenue Divisions of three airlines. In his spare time he enjoys traveling, but admittedly sometimes is more about the journey than the destination.

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