As German airline group Lufthansa continues to seek approval for its proposed take-over of the Italian national airline ITA Airways, the carrier has offered concessions to secure the regularity green light it requires.
The German airline requires European Commission approval for its planned acquisition of a 41% stake in Italy’s ITA Airways, a deal that was first proposed in January 2023. The airline has already stated its intention to purchase the remaining 59% of ITA Airways should the initial deal be passed.
In a late effort to allay any lingering anti-competitive concerns, Lufthansa has offered to divest slots at Milan’s Linate Airport (LIN), one of ITA Airways’ key hubs. The proposed deal, valued at €325M, is currently under the scrutiny of the Commission’s competition regulators, with a decision expected by January 29, 2024.
The European Commission’s review, which commenced on November 30, 2023, is currently focused on the assessment of the acquisition’s potential effects on the competitive landscape for passenger air transport routes within Europe and possibly further afield.
To alleviate regulatory concerns, Lufthansa’s concession to release slots at Milan Linate Airport is aimed at ensuring that competition remains fair and that consumers have access to a variety of choices when it comes to air travel.
ITA has an extensive presence at Linate Airport, although it has also been operating from Milan’s Malpensa (MXP) across the city for some time.
That said, ITA canceled the only route it operated from Malpensa to New York-JFK Airport on January 8, 2024. The route was inherited from its predecessor Alitalia connecting to New York but was deemed not economically viable, with ITA Airways preferring to base its long-haul operations at its primary hub of Rome Fiumicino Airport (FCO).
The Commission’s decision will determine whether Lufthansa’s efforts to negotiate approval will be successful, allowing the airline to proceed with its investment in ITA Airways.
ITA Airways was formed from the ashes of former Italian flag carrier Alitalia in October 2021. The carrier is currently state-owned, though Italy quickly decided to offload its interest in the carrier to private ownership. Lufthansa (in partnership with shipping giant MSC Group) was one of three parties to express interest in the carrier. The other interested parties were the Air France-LKM Group and Indigo Partners. However, the latter two failed to place initial bids for the airline despite having previously expressed initial interest in doing so.
ITA Airways currently operates an all-Airbus fleet of 83 aircraft, which consists of 10 A220s, 13 A319s, 39 A320s, 2 A321s, 13 A330s, and six A350s. It has a further seven aircraft on order.