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Lufthansa secures EU approval for $350 million stake in ITA Airways

Women's Tabloid News Desk
Women's Tabloid News Desk

Lufthansa has received the green light from the European Union to acquire a 41% stake in Italy’s ITA Airways for €325 million ($350 million). This move comes after Lufthansa agreed to give up certain routes and slots, a decision that also saw rival IAG’s shares rise by 4.6%, fueling optimism for its own potential takeover of Air Europa.

This strategic acquisition significantly enhances Lufthansa’s foothold in the southern European market, marking one of three major industry transactions aimed at scaling up operations amidst rising costs. Lufthansa CEO Carsten Spohr highlighted ITA’s Fiumicino airport hub as a crucial gateway to Africa and Latin America, underscoring its growth potential.

Following the announcement, Lufthansa’s shares climbed by 3.27% at 1339 GMT. The European Commission confirmed that Lufthansa and ITA would cede some Italian short-haul routes to competitors like EasyJet and Volotea. Additionally, the airlines will engage in interlining agreements or slot swaps for long-haul routes to enhance flight frequencies and connections.

A Lufthansa representative stated that 204 weekly slots at Milan’s Linate airport will be transferred to competitors during the summer, and 192 slots in the winter, ensuring better connectivity for competitors at key North American hubs such as Washington, San Francisco, and Toronto.

EU antitrust chief Margrethe Vestager commented, “The package of remedies proposed by Lufthansa and the MEF fully addresses our competition concerns by ensuring competitive pressure remains on all relevant routes.”

The deal’s completion hinges on the operation of routes by approved rivals, addressing previous frustrations where competitors failed to utilize allocated slots. Italy’s Economy Minister Giancarlo Giorgetti noted the tough negotiations, emphasizing the importance of the deal for ITA and the Italian taxpayer. Transport analyst Andrea Giuricin echoed these sentiments, praising the multi-hub strategy focused on Fiumicino.

Despite this approval, rebuilding ITA will be a challenge for Lufthansa, given the historical financial troubles of its predecessor Alitalia. The European Commission remains cautious about the dominance of the region’s top three airline groups—Lufthansa, IAG, and Air France-KLM—fearing potential impacts on consumer choice and affordability. The Commission is also reviewing IAG’s bid for Air Europa and Air France-KLM’s interest in a stake in Scandinavia’s SAS.

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