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Lufthansa Bid for Stake in ITA Airways May Be ‘Close to Approval’

The airline group has made several concessions as part of the deal.

ITA Airways’ first A321neo (Photo: Airbus)

The Lufthansa Group’s (Deutsche Lufthansa AG) bid for a 41 percent stake in ITA Airways may be close to approval by European authorities. Reuters cited multiple sources ‘with direct knowledge of the matter’ saying anti-trust regulators are ‘leaning towards clearing the deal’. However, no comment has been made by Lufthansa, the European Commission or the Italian government.

Speaking last month, Carsten Spohr, the chief executive officer of Deutsche Lufthansa AG was unreservedly positive about the deal. Euronews reported the CEO as saying Lufthansa’s deal would be “good news for Italian consumers and for Europe, because a stronger ITA will invigorate competition in the Italian market. As a young company with a modern fleet, and with its efficient and expanding hub in Rome, ITA is a perfect fit for Lufthansa Group. In Milan, ITA serves a strong catchment area which also offers potential for growth.”

“As part of the Lufthansa Group family, ITA can develop into a sustainable and profitable airline, connecting Italy with Europe and the world,” reported Euro News. “At the same time, this investment will enable us to continue our growth in one of our most important markets.”

The German consortium has reportedly made a number of concessions to facilitate approval of the deal. To dampen concerns in the longhaul market, Lufthansa apparently will exclude ITA from its transatlantic joint venture with Star Alliance partners, Air Canada and United Airlines, for two years. In addition to the German flag carrier, the ‘Atlantic Joint Venture’ also includes other airlines in the group’s portfolio: Austrian Airlines, SWISS, Brussels Airlines and Eurowings.

The Atlantic Joint Venture (JV) was inaugurated in 2010 and now, with the collaboration of the seven airlines currently involved, passengers can ‘mix and match airlines for outbound and inbound trans-Atlantic travel,’ They also have the ability to combine ‘multi-center holidays’ utilizing the JV’s access to sixteen hubs in Europe and North America.

To alleviate anti-competitive concerns on European short-haul routes, it was previously reported that 40 slots are to be be ceded at Milan Linate airport (LIN) to U.K.-based easyJet and Spanish carrier Volotea. Though easyJet has its headquarters in the U.K., the carrier also operates within the European Union under an Air Operator’s Certificate (AOC) and an airline operating license issued in Austria. This allows the carrier to register several aircraft in the country and benefit from the European Common Aviation Area (ECAA).

The European regulator is working towards a July 4 deadline for a decision on the deal. This will come after months of analyzing the Lufthansa Group’s initial deal and the concessions made. In addition, the regulator has sought submissions from other interested parties both within and outside the airline industry.

John Flett

Author

  • John Flett

    John has always had a passion for aviation and through a career with Air New Zealand has gained a strong understanding of aviation operations and the strategic nature of the industry. During his career with the airline, John held multiple leadership roles and was involved in projects such as the introduction of both the 777-200 and -300 type aircraft and the development of the IFE for the 777-300. He was also part of a small team who created and published the internal communications magazines for Air New Zealand’s pilots, cabin crew and ground staff balancing a mix of corporate and social content. John is educated to postgraduate level achieving a masters degree with Distinction in Airline and Airport Management. John has held the positions of course director of an undergraduate commercial pilot training programme at a leading London university. In addition he is contracted as an external instructor for IATA (International Air Transport Association) and has been a member of the Heathrow Community Fund’s ‘Communities for Tomorrow’ panel.

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