After more than seven months of intense negotiations, the EU has officially given its blessing to the ITA Airways-Lufthansa merger.
There were extensive concessions by both partiesAs expected the green light came in the wake of extensive concessions by both parties which protects competition at Milan Linate airport, on short-haul routes between Italy and Central Europe, and on long-haul routes between Rome Fiumicino and North America by giving space to competitors.
Lufthansa’s initial 41% will rise to 100% by 2033
The German Lufthansa Group, under its chairman Carsten Spohr, will therefore acquire a 41% stake in the Italian airline through a capital increase of €325 million, to then rise in a second stage, by 2033, to 100% of the newco, for a total investment of €829 million.
Protecting passengers’ rights
"We assessed the operation very carefully," said Margrethe Vestager, the European commissioner for competition. "We had to makes sure passengers did not end up paying more, or with fewer and lower quality air transport services on certain routes in and out of Italy. The remedy package proposed by Lufthansa and the Italian Ministry for Economy and Finance fully addresses our concerns, ensuring that a sufficient level of competitive pressure remains on all relevant routes."
ITA will leave Sky Team for Star Alliance
The two parties now have four months to implemente the remedies to guarantee competition, and the next steps are the capital increase, the statutory changes, the appointment of a new board of directors (three members, including a chairman for the Italian Ministry for Economy and Finance, and two for Lufthansa which will appoint the CEO) and the start of the relaunch plan. ITA will change alliance from SkyTeam to Star Alliance and there will be a request for the Italians to enter the A++ transatlantic joint venture between Lufthansa, United Airlines and Air Canada.
“We will be able to offer customers a significantly wider choice”
"The approval from Brussels is great news for ITA Airways and Lufthansa and especially for passengers flying to and from Italy. We look forward to welcoming ITA and its excellent staff as a new member of our airline family. The decision is also a clear signal that air traffic in Europe can successfully assert itself globally,- said Carsten Spohr. -We will be able to offer customers a significantly wider choice of connections and destinations, and thanks to Rome’s 5-star hub we will expand our premium offer, with better connections to future strategic markets south of the Equator. Despite the many concessions, the investment in ITA Airways strengthens the Lufthansa Group's position as a global player. We will make ITA Airways a strong and successful part of the Group, securing its future as an international airline and a brand with a strong identity. ITA Airways will support us in further expanding our position as the number one airline in Europe."
