On Wednesday 3 July, the European Commission finally announced that it had authorised the proposed acquisition of joint control of ITA Airways (‘ITA’) by its competitor Deutsche Lufthansa AG (‘Lufthansa’) and the Italian Ministry of Economy and Finance (‘MEF’), subject to compliance with the proposed remedies. Lufthansa will take a 41% stake in ITA.
The European Commission opened an in-depth investigation on 23 January (see EUROPE 13334/24). On 25 March (see EUROPE 13378/15), the Commission informed Luftansa and the MEF that it was concerned that the merger, as initially envisaged, would affect competition at Milan-Linate airport and on the market for passenger air transport services on several routes to and from Italy.
On 8 January, Lufthansa undertook to implement corrective measures to address these concerns, but the Commission considered that these proposals were not satisfactory.
Corrective measures. The Commission has authorised the transaction, subject to compliance with new commitments proposed by Lufthansa and the MEF to restore competition.
Lufthansa and the MEF will provide one or two rival airlines with the assets they need to start non-stop flights between Rome or Milan and certain Central European airports.
Secondly, the merged entity will enter into agreements with competitors to improve their competitiveness on problematic long-haul routes.
Finally, Lufthansa and the MEF will transfer take-off and landing slots at Linate airport to the beneficiaries of the corrective measures for short-haul routes.
European Consumer Organisation (BEUC) unhappy. BEUC, for its part, has voiced its disapproval of this authorisation, believing that the proposed corrective measures currently lack clarity. The association fears that consumers will ultimately bear the brunt of this concentration and, more broadly, of the consolidation taking place in European markets, through fare increases, a reduction in the choice of routes and a deterioration in the services on offer.
BEUC has called on the European Commission to resist political pressure to allow further market consolidation and to protect competition and the interests of consumers, rather than those of big business.
Link to the case: https://aeur.eu/f/cxh (Original version in French by Émilie Vanderhulst)